Tractor industry may record volume growth of 10 in FY 2017
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The Indian tractor industry is expected to record a volume growth of 9-10 per cent in the current financial year, mainly supported by a healthy monsoon, according to rating agency ICRA. 

"Healthy monsoon expectation, coupled with good reservoir levels, augurs well for farm output in the current fiscal. This, coupled with an expectation of improvement in non-farm income, aided by the Government's focus on rural spending, infrastructure creation and irrigation spending, is likely to drive the demand for tractors, which is expected to record a volume growth of 9-10 per cent this fiscal," ICRA said in a report. 

"Over the long term, we continue to maintain an annual growth estimate of 8-9 per cent for the industry. The long-term industry drivers for the industry continue to remain intact. The Government remains committed towards rural development and agro-mechanisation, a critical component in improving the state of agriculture in the country," ICRA Senior Group Vice President Subrata Ray said. He also said continued support towards enhancing irrigation penetration through fresh allocations would reduce rainfall dependence. "This, coupled with other factors such as increasing rural wages and scarcity of farm labour, is likely to aid growth in industry volumes," he added.

Tractor volumes reported a healthy growth during FY17, boosted by improving farm sentiments following healthy southwest monsoon and expectations of better cash flows in the backdrop of strong growth in kharif and rabi crop production. Additionally, ICRA said, government support programmes in various states also supported demand to an extent.

In April and May, 2017, leading tractor Original Equipment Manufacturers (OEMs) have reported robust double digit growth rates in domestic volumes. (Times of India, June 19, 2017)