New Delhi, Oct 26 (IANS): Hero Cycles has urged the government to provide policy support, including easy loans and subsidies, to support demand in the rural areas.

In a statement, the cycle manufacturer said that even as demand for bicycles is soaring in urban centres, the rural areas are witnessing an "uncharacteristically low" demand in the post-Covid months.

Boosting bicycle usage through policy initiatives will not only increase demand but also spur economic activity and create new avenues for income in rural areas, it said.

"The sky-rocketing demand for bicycles in the post-Covid period has primarily been driven by the fitness and recreation bike categories. While the demand for bicycles priced at Rs 10,000 and above has been unprecedented, the mass segment which is also the most affordable has plateaued resulting in low demand coming from rural areas," Pankaj M. Munjal, Chairman and Managing Director, Hero Motors Company, said

"We want the government to initiate some supportive policy measures to help rebound the sliding rural demand," he said.

The statement noted that while the new emerging cycling culture in urban areas has generated much discussion in recent months, the sliding rural demand has failed to catch much attention.

Low bicycle demand in rural India is a major indication of economic distress among the rural poor, the company said.

Munjal was of the view that with a massive reverse migration post lockdown, the rural economy is overburdened with the workforce. Job and income losses in urban areas have forced many migrants to return to their villages and small towns.

"Improving bicycle ownership can help create greater avenues for income generation and spur much-needed economic activity. The Government must consider slashing GST, particularly on low-end bicycles apart from creating avenues for easy bicycle loans and launch schemes for subsidising bicycle sales to the rural poor," he said.

Hero Cycles said that bicycles are currently taxed at 12 per cent GST, and reducing the same to 5 per cent can make them more affordable to a larger consumer base.