Market round-up: Consumer durables set for demand boost
Forecasts point to a 15-20% expansion in sales volume across products, when compared with a year ago
World Bank deflates ease of doing business hype
The World Bank’s ease of doing business ranks are based on what it calls the ‘distance to frontier’ on improvement in the business environment. Says the Bank, “An economy’s distance to frontier is reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. For example, a score of 75 in 2016 means an economy was 25 percentage points away from the frontier constructed from the best performances across all economies and across time." As the chart shows, India not only has a long way to go to catch up with its competitors in the region on this yardstick, but its improvement in the ‘distance to frontier’ score was also less than that of China, Vietnam and Indonesia in the past year.
Subdued tax revenues point to tepid recovery
An analysis of about 16 states that account for 70% of all states’ taxes, shows that their tax revenues remain sluggish. States have been missing their tax targets for the past three years; and this time, too, they may not be able to meet the budget estimates. States’ tax revenue growth during April-July 2016 is running in single digits (6%, year-on-year) versus the budgeted growth of 20% for FY17, an Edelweiss Securities report said. Thus, this weakness in tax revenues confirms that economic recovery is tepid and not broad-based.
Demand lights up for consumer durables
Preliminary data show that there is a greater exuberance in demand for consumer durables as the festival season sets in. Forecasts point to a 15-20% expansion in sales volume across products, when compared with a year ago. A higher disposable income, attractive pricing and improved retail lending, according to Emkay Global Financial Services Ltd, are the reasons for the demand pick-up. This comes after a prolonged 24 months of sluggish sales.
Among products, refrigerators, air-conditioners and wooden furniture sales showed the best traction. Footfalls and enquiries are rising on the one hand and, inventory build-up is gaining pace on the other. Recent dealer-channel checks show that the demand for durables has been far more robust than that for consumer staples and packaged consumer goods.
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