The Finance Ministry noted worries about declining consumer confidence and weaker demand, especially in urban areas.
Despite these concerns, the Ministry expects the economy to grow between 6.5% and 7% through 2024-25.
While rural demand has improved due to good monsoon rains, urban demand is showing signs of slowing down.
Sales of fast-moving consumer goods in urban areas are declining.
Automobile sales dropped by 2.3% in the first half of the year.
Housing sales also fell in the second quarter.
Factors contributing to the decline include:
Softening consumer sentiments.
Reduced shopping due to heavy rainfall.
Seasonal trends affecting purchasing behavior.
The Ministry is hopeful that the upcoming festive season might improve consumer sentiment and boost urban demand, but early signs are not promising.
Manufacturing growth was only 1% in August, with signs of further softening in September.
Risks to growth include geopolitical conflicts and economic issues in advanced economies that could affect consumer spending in India.
Despite the concerns, some surveys show slight improvements in consumer optimism and manufacturing outlooks.
The Ministry emphasizes the importance of watching demand conditions closely moving forward
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