‘Rural spend, demand will lead to pvt capex growth’

MUMBAI: With the revival of the much-delayed rural consumption on the back of growing income, aggregate demand conditions are gathering momentum, which in turn will lead to the revival of private capex, says the RBI bulletin for July.

“This stimulus to demand is expected to reinvigorate the hitherto subdued participation of the private sector in total investment,” the bulletin released on Monday said in the state of the economy section, which is co-authored by the deputy governor Michael Patra.

High frequency indicators suggested that demand conditions remained firm in July with e-way bills recording a growth of 19.2% and toll collections rising by 9.4% in July. The chapter also says that headline inflation moderated from its spike in June to 3.5% in July, but quickly notes that this is primarily due to the downward statistical pull of base effects.