The robust growth momentum recorded by the tractor industry this year is expected to sustain growth during the next fiscal as well, top executives from leading tractor and farm equipment manufacturers told Mint. The sustained growth in tractor demand for another year is seen on strong fundamentals such as robust kharif sowing now leading up to good output that is expected to generate good cash flows for the farmers as the kharif harvest season has begun, continued government support in the form of procurement and spending on agriculture and rural economy along with the high ground water levels. Besides support to the agriculture sector, rural economy also received a significant boost on the central government’s increased spending under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) during H1FY2021. Riding on these tailwinds, the tractor industry has reported a growth of over 40% YoY during H1FY21, according to the market leader Mahindra and Mahindra Ltd (M&M). We continue to witness unprecedented retail demand for tractors on the back several positive factors. Successive bumper rabi and kharif crop harvest coupled with timely procurement of crops, ensured seamless circulation of money in the rural economy, said Hemant Sikka, president, farm equipment sector, M&M.
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