Economy feels the squeeze as consumers tighten belts BMC polls ahead: Fadnavis, Uddhav put up united front
NOVEMBER PAIN Data show sharp fall in purchases; FMCG, retail, real estate, automobile sectors badly hit
In the first real evidence of the impact of demonetisation on the economy, data coming in showed a sharp drop in consumer purchases in November, with mobile phones, FMCG, home appliances, real estate, and cars bearing the brunt.
There is hope of a recovery once the cash crunch ebbs, but, for now, the news is grim. Sales of fast-moving consumer goods (FMCGs) — soaps and cosmetics — were down 30% in November over the same period last year. A drop in car sales — ranging 15% to 40% — has been reported by dealers. Small towns, where mobile phone business was booming, have seen a 70% drop while 35% fewer phones were sold in cities.
Real estate reported a 50% fall in enquiries, 30% in resale prices, and 20% in searches online. Air tickets sold 15% less in November, forcing carriers to cut average fares on the 11 busiest routes by 20% to 30%.
E-commerce sees a drop in postfestival season but November’s fall – 25% to 30% — over October was unusually sharp. “Our orders dropped about 25%, primarily because of cash-on-delivery items, which has been 70% of all orders,” said TA Krishnan, CEO of Ecom Express, which moves packages.
After months of constant bickering, chief minister Devendra Fadnavis from the BJP and Shiv Sena chief Uddhav Thackeray showed great camaraderie at a civic event in Bhandup, fuelling speculation that the two warring allies are considering a tie-up for the crucial Mumbai civic polls.
While there were doubts over the party’s stand, Fadnavis and Thackeray put up a picture of unity as they inaugurated the Yuva Sena chief Aaditya Thackeray (second from left), Shiv Sena president Uddhav Thackeray (centre) and CM Devendra Fadnavis inaugurate a water tunnel at Bhandup.
Rs2,887-crore tunnel running between Gundavali in Thane and Bhandup water complex.
Thackeray requested Fadnavis to fast-track the Brihanmumbai Municipal Corporation’s (BMC)
projects, which have been stuck at the state-government- or centralgovernment-level, and Fadnavis promptly agreed for a review meeting.