A consumption slowdown is afoot, but govt denies it

India is in the grip of a consumption slowdown. From home and auto sales to lifestyle products, latest data testifies to the slowdown, but the Centre has denied the slump, stating that a few sectors were booming with demand.

“I don’t think there is a consumption slowdown, Economic Affairs Secretary Subhash Garg told DH. “Many a time, we tend to misread the numbers. There are some sectors which may be facing a slowdown but that is temporary. Some others are witnessing good demand. For example, food consumption, telephone, data consumption.”

His assertion came even as Maruti Suzuki cut vehicle production for the fifth month in a row in June. The company’s shares have fallen 10% in the past three days.

Maruti is not alone. The lead indicators of rural consumption—tractor and two-wheeler sales—have also seen a perceptible decline in the past few quarters.

Shares of Titan saw its steepest fall in six years on Tuesday, down close to 13%. Titan is facing a tough macro-economic environment, with consumption being hit in April-June quarter with rising gold prices.

In an exchange filing, Titan said “very high gold prices, particularly in June, impacted growth in jewellery industry”.

“Against this background, the company’s growth, particularly in jewellery segment, was lower than planned, though gains in market shares were sustained,” said Titan.

Housing absorption in the country’s top seven cities, including Bengaluru, was down close to 13% in the April-June quarter compared to the January-March quarter. For the first time since 2016, total unit launches are more than units sold in the quarter. The unsold inventory has been witnessing a status quo at 6.65 lakh units.