Tractor sales in India record double-digit rise driven by robust farm sector growth
With the agriculture sector recording a surge in growth during the current financial year, Mahindra & Mahindra has recorded a double-digit rise in tractor sales for the third month in a row in February.
After having recorded a 19 per cent increase in sales during February, the company expects the robust growth to continue into the final quarter of 2024-25 (FY25), M&M’s Farm Equipment Sector President Hemant Sikka told a TV business news channel.
He said that there has been a lot of buoyancy in the farm sector as the kharif crop was very strong this year on the back of a good monsoon. This has also raised the level of water in the country’s reservoirs to a 10-year which will help the rabi crop that was sown in winter.
He highlighted that the government has supported the farm sector with an increase in MSP (minimum support price) for key crops which enhance the earnings of farmers. The inflation rate has also come down for farmers which will place more money in their hands. All these factors are responsible for generating a strong demand for tractors, he added.
For the financial year 2024-25, the GDP growth is estimated at 6.5 per cent given the robust growth in the agriculture sector which has turned out to be a bright spot registering a robust growth of 5.6 per cent in Q3 compared with a 1.5 per cent increase in the same quarter last year, the report states, according to a Bank of Baroda report released on Wednesday.
The report also expects the RBI to lower key rates further to boost economic growth as inflation has come down.
It points out that the RBI’s monetary policy committee unanimously lowered the repo rate by 25bps from 6.5 per cent to 6.25 per cent. The stance was kept at neutral. The RBI Governor noted the need for a "less restrictive" monetary policy to support growth as inflation remains within the RBI’s targeted band. The central bank expects growth to improve in FY26 to 6.7 per cent from 6.4 per cent in FY25. Inflation is projected to come down to 4.2 per cent in FY26 from 4.8 per cent in FY25. The CPI will remain broadly sticky in Q4FY25 (4.4 per cent) and Q1FY26 (4.5 per cent).
