rural India has an 80% shortfall of specialist doctors. MP, Gujarat, Tamil Nadu worst off
Findings mentioned in Health Dynamics of India 2022-23 report released by health ministry. Data show that availability of specialists in urban areas was slightly better. Key Points
ThePrintrural India drives passenger vehicle sales record in FY24
In FY24, a total 4.23 million passenger vehicles were sold in India, rising 8.7% from 3.89 units the previous year, which was also a record. Key Points
mintIs rural India wheeling its way out of demand depression?
India's rural economy faces challenges amid the overall economic growth, with disparities persisting. However, signs of rural demand revival emerge through increased two-wheeler sales and FMCG industry growth. The government and industry stakeholders are optimistic about further recovery, banking on factors like improved infrastructure and a normal monsoon. Key Points
Economic TimesWhen the farm sector cooled, construction rode to the rescue
Despite the slowdown in the farm sector, only 27.72 million persons demanded work every month on average in FY24 under the Mahatma Gandhi National rural Employment Guarantee Act (MGNREGA), barely changed from 27.63 million in FY23. Key Points
mintIs the bottom of the pyramid also a big opportunity? 4 small finance banks with upside scope of up to 41%
While it's commonly thought that auto and FMCG companies are prime indicators of the rural economy's health due to their direct consumer engagement, small finance banks (SFBs) may actually provide a clearer picture of the rural and semi-urban economic landscape. This clarity comes from their operational focus on these less urbanized areas and their direct involvement in lending to local businesses. Despite facing various challenges, SFBs have seen growth, driven largely by the unmet demand for capital at reasonable interest rates in rural areas. They offer credit to the bottom of the pyramid, at more favorable rates compared to traditional options which were available till a few years back, filling a critical gap. Key Points
Economic Times
rural spending getting captured in urban consumption; women SHGs helping boost incomes: SBI Research
According to SBI Research, improvements in physical infrastructure and connectivity have led to a shift in rural demand and supply patterns, with rural spending being captured in urban areas. The phenomenal growth in the income of self-help groups and increased banking linkages are contributing factors, with rural female labour force participation rising due to the support provided by self-help groups. Key Points
Economic TimesAre Bharat & India closer? Yes, but…
India News: Find out the key findings of the All India Household Consumption Expenditure Survey and its implications for the Indian economy. Discover the changing consumption patterns, rural-urban divide, and the impact on GDP and CPI. Are Bharat and India really getting closer? Read more to find out. Key Points
Times Of IndiaFrom beverages, packed food to medicines: How India’s spending patterns stack up
Food’s share in total household spending is now less than half in rural areas for the first time, official survey data showed. On average, a rural person spent ₹3,773 per month, compared to ₹6,459 per month in urban areas. Key Points
mintRural-urban household spending gap narrows
The Household Consumption Expenditure Survey (HCES) 2022-23 in India reveals that the gap between urban and rural household consumption has significantly narrowed. The survey will impact the calculation of inflation, poverty, and consumer price index series. Key Points
Economic TimesView: Budget gets bigger picture right on walking the fiscal tightrope
The biggest positive in the interim budget was the fiscal discipline displayed by capping the fiscal deficit for 2024-25 at 5.1%. The fact that the government has not curtailed capital expenditure and has, in fact, enhanced it to ₹11.11 lakh crore only builds on the foundation laid in the previous years and takes it forward. This is a budget that seeks to balance growth with fiscal prudence. Key Points
The Economic Times
Budget 2024: More jobs, infra push or social security - What 'Bharat' may get before Lok Sabha elections?
Budget expectations: As India prepares for the 2024 interim budget before the Lok Sabha elections, there is optimism that the budget will focus on rural jobs and schemes, including initiatives like 'Make in India,' expansion of Production-Linked Incentive (PLI) schemes, and targeted agriculture-related subsidies and incentives. Lower subsidies in the budget may put pressure on rural demand, but the government is expected to divert savings towards spending on rural infrastructure and incentives that improve cash flow. Challenges in the rural job market include underemployment and limited skill development opportunities, while inadequate rural infrastructure and insufficient social security measures also need attention. Key Points
Economic TimesBeyond agri theme: 4 mid & smallcap stocks to play changing rural economic matrix
While a large part of India’s rural economy is about agriculture, in the last couple of years, there has been an effort on the policy level that other parts of the rural economy which are not agricultural related get the boost. So be it horticulture, animal husbandry and fishing all of them have been a push in one form or other to increase both productivity and income levels. From an investment perspective, there are few players which are listed as a large part of this is still with smaller players who operate on a regional basis. But as the overall market size grows the large players are increasing their presence. This is not to say that there are only opportunities and no challenges. The biggest being the fact that any change in the rural economy matrix is always time consuming, so companies need to have the ability to go through long cycles. Key Points
Economic TimesBudget 2024: A pressing issue that may not wait till full budget
The fiscal deficit target of 5.3% will be set by the government in FY25, keeping in view the fiscal consolidation path till FY26, as it normalises capital spending and refrains from any major announcements in the interim budget before the general elections, Icra and Barclays economists have said. ICRA expects the fiscal deficit target for FY25 to be set at 5.3% of GDP, midway through the expected print of 6.0% for FY2024 and the medium-term target of sub-4.5% by FY26. Key Points
Economic Timesrural demand for packaged goods remains weak in December quarter
Packaged consumer goods in rural India saw tepid demand in Q3FY24, raising concerns over FMCG sales volumes. Volume growth in rural markets is expected to be flat or slightly lower compared to urban markets. Key Points
mintNomura sees rural demand gathering steam in 2024
The global investment banking firm noted that even though growth is expected to slow down in the coming fiscal to 5.6% from 6.7% projected in FY24, mass consumption may rise as easing price pressures support mass consumption. Key Points
Economic Times
Budget 2024: Bharat at the heart of Budget's economic reforms to help India glitter
Interim Budget: The upcoming Union budget shifts focus to Bharat, India's rural heartland powering 65% of its populace and pivotal GDP contributions. Envisioning a USD 5 trillion economy hinges on rural sector metamorphosis. The budget signifies a pivotal moment to recommit to rural upliftment. Its not just about sustaining growth but orchestrating transformation via a multifaceted strategy—prioritising policies, infrastructure, education, and tech advancements to unlock untapped potential, ensuring holistic and inclusive progress. Key Points
Economic TimesWeak rural demand set to hit consumer goods sales in Q3
Rural demand for daily household products and groceries has been challenging in villages, potentially impacting the overall consumer goods sector's volume growth. rural volumes, which have been lagging urban growth for over a year, could either decline or remain flat due to inflation and the proliferation of smaller regional players. Upcoming general elections and a further reduction in inflation are likely to lead to a gradual improvement in FY25. Key Points
Economic TimesInside the 2024 shopping bag: Where is the Indian consumer headed?
Indian Consumers: While the affluent segment gravitated toward luxury apartments, high-end cars, and premium consumer goods, lower-income brackets grappled with inflation and rural hardships. Sales surged for luxury items, bustling malls and restaurants, alongside a spike in hotel room rates due to heightened demand. Conversely, FMCG companies faced stagnation in selling everyday items like biscuits, soaps, shampoos, and perfumes, yearning for increased consumption rates. Key Points
Economic TimesConsumer companies see demand back on track from March-April
Consumer goods companies were earlier expecting demand to recover in the December quarter. While that hasn't materialised, chief executives said slowdown in consumption has come to a halt and that sales of mass-segment products are picking up after a gap of over three years. While volume growth for the fast-moving consumer goods (FMCG) industry in urban India has been on a positive trajectory since April-June last year, rural markets have grown marginally this calendar year, according to market researcher NielsenIQ. Key Points
Economic TimesMinistry of rural Development signs MoU with Reliance JioMart
The Ministry of rural Development has entered into a Memorandum of Understanding (MoU) with Reliance Retail's JioMart to facilitate the outreach of products from Self-Help Groups (SHGs). The collaboration aims to onboard SHGs from the Deendayal Antyodaya Yojana National rural Livelihoods Mission as sellers on the JioMart e-commerce platform, providing them with an opportunity to expand their market and visibility. Key Points
Economic Times
FMCG market to recover completely only by April-June quarter next year
Since a year, there has been a noticeable drop in rural volume due to inflation and erratic monsoons. While the demand in cities is leading the overall growth with urban incomes more resilient, companies expect rural volume to recover on the back on a decent monsoon, which generally translates into higher sales after a quarter lag. Key Points
Economic TimesChakri Lokapriya on how to play defence and premiumisation themes
“With valuations way up there, FMCGs will tread water for the next couple of quarters because there are no real signs of an acceleration of push. But there are pockets where you will start to see spending because things like, four- wheelers SUVs, which are rural plays but also election related plays.” Key Points
Economic TimesInvesting in Bharat: 3 stocks which benefit from government focus on increasing rural incomes
Somehow a narrative has been built that if one has to play on increasing rural income, it is either FMCG for two wheelers which are the stocks to look at. Yes it might have been true couple of decades back, but the fact is that in last couple of years there has been many companies which are focussed on purely on rural economy So, they sell their product on in that particular market and when there is boom in that part of the economy, the incremental addition to their margin is high. These companies form the part of the rural income chain. Both the companies which are focussed on increasing agriculture productivity and the non agriculture side of rural incomes have been in focus. Key Points
Economic TimesET Explainer: Why are two-wheeler sales picking up in rural markets when other categories are under stress
The two-wheeler industry in India has seen a decline in sales due to rising prices and the pandemic's economic impact. Sales of motorcycles, scooters, and mopeds fell nearly half to 13.58 million units in FY22. However, rural markets are showing signs of a turnaround, with moderating inflation and improved disposable incomes. Motorcycles continue to dominate two-wheeler sales in India, accounting for about 65% of the market. The growth in rural sales is driven by pen-up demand, moderating inflation, and a stable job market. Key Points
Economic TimesLending to the bottom of pyramid: 4 small finance banks with upside scope of up to 36%
When it comes to the rural economy, most believe that it is auto and FMCG companies which give a good idea how the rural economy is working, But there is another set of companies which might have a better insight on how the rural and even semi urban part of the economy are doing because they work in this part of the country and also because of the fact of lending in those businesses which operate in the area. Despite all the headwinds, these small finance banks have been able to grow. Key Points
Economic Times
Changing money lending business in Bharat: 4 small finance banks with upside up to 36%
When it comes to the rural economy, most believe that it is auto and FMCG companies which give a good idea how the rural economy is working, But there is another set of companies which might have a better insight on how the rural and even semi urban part of the economy are doing. Both because they work in this part of the country and also because of the fact of lending in those businesses which operate in the area. Despite all the headwinds, these small finance banks have been able to grow, the reason, the overall demand matrix of demand of capital in rural areas at a cost which is better than existing sources. Key Points
Economic TimesRBI governor’s growth optimism overlooks India’s rural distress
Letting realism prevail over Panglossian statements will help the central bank get a better handle on tail risks. Continuing rural stagnation should ideally focus attention on the distributional effects of monetary policy. Key Points
mintGovt advances deadline, housing for all in rural India by Dec 2023
The NDA government has accelerated its 'housing for all' initiative for rural India, bringing forward the deadline by three months to December 2023. The government aims to build 29.5 million houses for beneficiaries under the PM Awas Yojana (Gramin), with 24.5 million houses already completed. The remaining houses are at various stages of construction and will be finished by December. Key Points
Economic TimesHow to cash in on the almost bottom-up story of rural recovery? Gurmeet Chadha explains
“Elections are coming; on Wednesday, the government increased the DA for government employees and pensioners. We will see more and more rural spending pick up with the crop season, with a lot of announcements, as well as a huge festive season ahead. I expect the rural economy stocks to start picking up a little bit from here on.” Key Points
Economic TimesConsumer companies anticipate rural mandate with Assembly polls around the corner
Consumer goods companies and automakers are optimistic that the upcoming elections in India will boost rural demand. Elections often lead to increased government initiatives, which in turn, stimulate rural incomes and liquidity. Companies like Marico, Dabur, and Godrej Consumer Products have noted that elevated food prices and below-average monsoons have delayed the recovery of the rural economy. During elections, political parties offer incentives in rural areas to gain support, such as subsidies, cash transfers, and policy moves that increase disposable incomes. Key Points
Economic Times
Work demand under rural jobs scheme rises in H1
About 93% of the FY24 budgetary allocation of ₹60,000 crore for the Mahatma Gandhi National rural Employment Guarantee Scheme (MGNREGS) has been released, a person familiar with the details told ET. This has prompted the rural development ministry to seek substantial supplementary demands for funds to run the scheme throughout this fiscal year, he said. Key Points
Economic TimesInflation, extreme weather events could spoil the party for India Inc in Bharat
However, inflation was high for most of FY2023. This means the earnings of low-income families —those in rural areas as well as minimum wage earners in urban areas — have broadly been stagnant. But a moderation in inflation, apart from factors such as increased government spend and a rise in incomes, is expected to aid consumer sentiment and, in turn, spending. Key Points
Economic TimesGovt panel suggests sharp hike in NREGS wage rates, budgetary outlay
A high-level government panel, tasked with recommending changes to make the rural job guarantee scheme more effective, has called for a significant increase in the extant wage rates--over and above the recent annual hike--and the budgetary allocation for the programme. The report was submitted with the rural development ministry in July and is yet to be made public. Key Points
Economic TimesView: A look at banking presence and PM Modi's financial inclusion efforts
The RBI has highlighted that important forces boosting socio-economic growth are the financial activity of the banking industry. rural development also means transformation of the rural population. It is a strategic move, in line with the governments aim to double farmers' income. Key Points
Economic TimesBright spot: rural consumption to pick up on wage rise and lower inflation, say economists
Economists said high-frequency data also points at a revival of rural consumption. However, experts cautioned that monsoon could play a spoilsport. Key Points
Economic Times
Explained: Why rural demand is crucial for India’s economic growth
The significance of rural demand in fueling India's economic growth is often underestimated compared to urban consumption. But here's why it matters. Key Points
India Todayrural demand on track, El Nino to have little impact: FMCG companies
There is no immediate impact of El Nino on rural demand, said Mohit Malhotra, chief executive of Dabur India. rural demand, for us, has already started showing a recovery, and with inflation softening, we expect rural recovery to gain momentum in the coming quarters. Key Points
Economic TimesHow to hedge your risks after a one-way rally? Anand Tandon answers
Independent analyst Anand Tandon says that slightly out of fashion stocks like HDFC merit a relook given that it has eased off because of technical action. He further says one of the major themes to look for in the second half is rural India driving some of the demand growth assuming that the monsoon is not a total disaster. One can also be looking at markets outside India.” Key Points
Economic TimesWhat hikes in MSP mean for the economy and politics
The hikes bode well for nascent demand recovery in rural areas. rural inflation was higher than urban inflation in FY23, the first time in six years. While the average inflation in FY23 was 6.7%, prices in rural areas increased 6.8% from a year earlier. Key Points
Economic TimesLong-term plays! 4 stocks which benefit from increasing rural income have upside scope of up to 31%
The government has been focussing on specific industries which don't come under the traditional definition of agriculture but still are very important for increasing the income of marginalised sections in coastal and rural areas. Right from an animal feed maker to an exporter of poultry products, a number of companies which are part of the rural economy are likely to be beneficiary as policy makers focus on increasing rural incomes. Key Points
Economic Times
Will it rain on India’s parade? El-Niño on top of mind of businesses that have an eye on the countryside
Indias rural heartland bets on the monsoon — forecast to be delayed, but normal, this year. But El Niño could play joker in the pack, and drag rural consumption down. Key Points
Economic TimesAs India's job bandwagon picks up, IT sector falls off pace: DBS report
A slowdown in consumer demand post the pandemic and uncertain macroeconomic conditions triggered mass layoffs across Big Tech firms over the past few months - including in companies like Meta, Amazon, Microsoft, and Alphabet. In India, Reliance Industries was the latest to hand out pink slips, with its online wholesale format JioMart laying off more than 1,000 employees, with more jobs cuts expected. Key Points
Economic TimesWhat's getting M&M excited about rural sentiment despite a dip in tractor sales
Ramesh Iyer said tractors in rural parts of India are a need-based product and have been performing extremely well . Furthermore, the positive sentiment in the rural markets is likely to drive growth for the farm equipment sector (including tractors) for the next two or three years, he added. Key Points
Economic TimesIndia’s unemployment rate climbs to four-month high in April
The nationwide joblessness rate rose to 8.11% in April from 7.8% in March, the highest since December. Urban unemployment climbed to 9.81% from 8.51% in the same period while in the rural areas, it fell marginally to 7.34% in April from 7.47% a month ago. Key Points
FinancialexpressNumber of families seeking work under MGNREGS continues to fall post-pandemic, figures reveal
The data shows that the average days of employment provided per household too came down to 47.84 days during 2022-23 from 50.07 days in 2021-22. Key Points
The Indian Express
National Sample Survey: Key findings and what they mean for economy
Independent Data is a programme's best guide. The data in NSS will help India achieve the SDGs by 2030. Read with the findings of the National Family Health Survey - 5 (2019-2021), it is possible to adopt evidence based mid - course changes to achieve the outcomes. Programmes have to become more flexible in responding to independent findings. Key Points
Economic TimesMGNREGS wages raised by up to 10.4% for FY24
In absolute terms, the daily wages have been raised in the ₹7-26 range, according to a notification by the rural development ministry. The increase assumes significance, as the MGNREGS rates serve as the benchmark for rural wages and influence the rise in industrial wages as well. Key Points
Economic Times‘Agri resilience to weather shocks better’
We know that after covid, non-agriculture growth is very high. Then obviously because of that higher growth, you will see higher impact on consumption in urban area than in the rural area. Key Points
mintIndia’s poverty rate declined to 4.5-5% in 2022-23: SBI Research
India's poverty rate declined to 4.5-5% in 2022-23, with rural poverty declining to 7.2% and urban poverty down to 4.6%. This decline is attributed to government programmes targeted at those at the bottom of the pyramid. Spending inequality is shrinking due to enhanced infrastructure and increased discretionary spending. The new weights in HCES data are likely to lower inflation numbers. Key Points
Economic TimesRural-urban wage gap narrows in manufacturing; greater mobility, MNREGA factors
Greater mobility, higher payouts under NREGS, and lower urban wage elasticity are bringing parity between urban and rural manufacturing units. The gap between rural and urban wage growth has widened post-pandemic. The relative stickiness of urban wages with regard to profits may be a factor in the narrowing of the gap. Key Points
Economic Times