Karnataka tops in Tractor Sales with 18% CAGR: Study

Karnataka has ranked top in tractor sales across the country, with 18 percent compounded average growth rate (CAGR) for eight years from 2004-05 to 2011-12, a study by an apex trade body said Tuesday.

“Karnataka is the only state to have registered higher growth than all-India level of 16 percent CAGR in sale of tractors over the period under review,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a study “Future outlook for demand of tractors in India”.

At the same time, the study by the trade body’s economic research bureau found that tractor penetration was, however, poor (three percent) in the southern state in contrast to Haryana and Punjab at 27 percent each, followed by 23.5 percent in Uttar Pradesh, 20 percent in Bihar and 12 percent in Odisha.

“As demand for tractors is dependent on agriculture output and rainfall, a normal monsoon this year will push sale of tractors in the later half of this year,” Assocham secretary-general D.S. Rawat said, citing the study.

“Though tractor penetration in India is low, there is a huge potential demand for it if we have a normal monsoon this year as predicted,” he said. Tractor production grew 10 percent CAGR across the country during decadal period of 2001-02 and 2012-13, the study said.

On export of tractors, India ranked third with 26 percent CAGR behind China (30.5 percent) and Poland (31 percent). Growing at 20 percent CAGR, the domestic tractor industry is likely to cross eight lakh units in volumes by the end of 2015-16.

“Increasing application of tractors for non-farm operations like infrastructure and construction projects, transportation, haulage and better crop realisation through higher minimum support prices are key growth drivers of its industry,” Rawat added. Apart from being used in farming, tractors also find application in activities such as canal irrigation, land reclamation, drawing water, powering agricultural implements. (IANS)