DATE: 19-09-2019 R.

SOWMYA
DEPT: MBA
STUDY OF YEAR:1ST Year

MANAGERIAL ECONOMICS

ASSIGNMENT-1

Observation On Case Study

The entire case study deals with the sliding of demand which has been involved
with various scenarios of different part of rural families in Madhya pradesh,
analysed by many research firms and sector analyst. The major and common
problem that are been faced in the rural area of this case study is because of
income level been stagnated and consumption slowdown. Also the current
slowdown is driven by the demand collapse, which was reported by an associate
professor of economics. Looking upon the slow moving consumer goods, rural
growth is slowing down at double the rate of urban says an market research firm.

Volume growth as in four years and total volume in rural india has turned
negative for the first time. The fast moving consumer goods(FMCG) brands
pushed smaller packs to drive sales, average annual consumption of FMCG
products across India fell by 4% in 2019, nevertheless households spent 9% more
than what they did in 2018, says another research team. Other sector analyst spots
the decent volume growth due to increased formalization, following
demonetization and goods and services tax roll out where larger players seem to
have gained market share at the cost of smaller firms.

People in the area couldn’t able to purchase the product and utilize it to the family.
Due to this the purchase power becomes low and the people don’t demand for the
product too. Further this made the people to change purchasing product from high
quantity to low quantity. Some often feels so hesitant to buy cheaper items too.
Here in the case study these three people, Jitendra Raghuvanshi who runs grocery
store, FMGC Distributors warehouse, and Yogendra Rana who setup private
school on his family acre faces the same problem as stated above.

Students getting dropped out from the school as the family struggling to pay the
fees on stipulated time, it’s because half of the students are from farmers family
where they couldn’t able to afford to pay the fees. The major reason concerning
this issue is basically due to poor income level. This happens just because the
people are so uncertain about the future economy level, instead spending in
DATE: 19-09-2019 R.SOWMYA
DEPT: MBA
STUDY OF YEAR:1ST Year
procuring the products for their household goods, they are consuming the money
for their future needs.

As given in the case study, these three people belong to the margin of the Indian
economy which is the grip of a slow down, growing at 4.9% in June quarters of
2019-2020, considered to be the slowest in six years. Another information about
the census data at 2011 can be inferred that the earnings of 119 million farmer
households have eroded with those consecutive years of drought in 2014 and
2015, which were followed by a collapse in wholesale prices of crops from 2016
onwards, which was exacerbated by demonetization and April – June quarter of
2019 – 2020 form sector growth slowed to 2%, which seems comparatively poor
than a year before which was 5.1% .

Wages in agricultural occupations declined by 0.5% in two years to June 2019.

Rural and urban consumption expenditure declined by 4% year between 2014 -
2015 and 2017 – 2018, unless there is a change in checking for the slide in the
demand this state of Indian economy keeps going down.