Growth in domestic tractor sales volume to be limited to 3-5 per cent this fiscal
Despite the forecast of a normal monsoon, the growth in domestic tractor sales volume will be limited to 3-5 per cent in this fiscal due to the second wave of Covid-19 infections and rising cases in the hinterland, apart from the high base effect of last year, rating agency Crisil has said in a note.
Domestic tractor volumes had posted a huge 27 per cent on-year growth last fiscal to a record 9 lakh units. This growth was driven by strong government spend on rural schemes and an increase in farm incomes, supported by a good monsoon.
Further, rural India was less impacted by the pandemic last fiscal and farmers redirected savings from spending on marriages, towards tractor purchases.
According to Crisil, part of the good performance is expected to continue this year with a forecast of a well-distributed and normal monsoon.
This should benefit farm incomes and help sustain the demand for tractors.