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Many worrying news have emerged from the country’s rural economy. The pace of improvement in the rural economy has slowed down. Wages in rural areas declined for the 16th consecutive month in March. On the other hand, there is also a report that despite the softening of inflation, consumers are still preferring only branded products with small packets.

Income hit by inflation 
Due to high inflation, the income of the people of rural areas has been hurt and their purchasing power has decreased. Unemployment has also increased significantly in rural areas. This is also confirmed by the fact that the demand for work under MNREGA has increased in June. During June, about 4.42 crore people worked under MNREGA. This is 2.3 percent more than a year ago. The demand for work under MNREGA had also increased in the month of May. According to a report by the Center for Monitoring Indian Economy, unemployment has reached a two-year high of 8.73% in the month of June.

Slow vehicle sales
If we go by the sales of vehicles, then there are mixed signs. There has been an increase of 7 percent in the sales of tractors between January and May. However, the number of vehicles coming out of Hero Moto Corp’s factory declined by 9 percent in June. Rural markets account for almost half of Hero’s total production. Overall, vehicle sales remained sluggish.

Small pack demand
Another important report related to the economy is that despite the softening of inflation in recent months, consumers are still preferring branded products with small packets. There has been an increase of 23 percent in the sale of small packet products in May. There was a huge demand for such products especially among the consumers of rural areas.

Last year, when there was a period of high inflation, consumers were buying small packet products, but they had a hope that prices would come down later. But in the month of May this year too, there has been a good growth in the sales of these products. According to Bizom, a platform associated with about 75 lakh grocery stores, the share of small pack products has increased rapidly as compared to products with midsize and large size packs. This is considered a matter of concern for FMCG companies, because sales in rural areas play an important role in the growth of such companies.