Key Points
Independent analyst Anand Tandon says one has to look for spots assuming liquidity continues to be reasonably buoyant, you would get opportunities in sectors like, for example, IT which again has fallen off a cliff and is likely to remain subdued but unlikely to fall anymore..
Rains will be a factor but increasingly you will find that rural India is not dependent on agriculture only and whenever there is a case made of monsoons failing, we say that more than half the income that the rural India gets is not from agriculture, but overall as you pointed out, the macro theme at this stage is not so much the monsoon..
There is nothing much one can do about it but the kind of spend that the government will do and the kind of transfer of money that the government is likely to do, given that we are in an election year and I am still betting on the fact that we will get significant transfers in case there is a serious problem in terms of rural consumption or rural income because of El Nino or monsoon failure..
There is a possibility that we will still get a reasonable amount of rainfall so the shortage may not be that much but since some of the commodity prices have eased off and inflation has come down, it gives the government a little more headroom to be able to go out and spend a little more and transfer more money to rural India..
I would imagine that for this year at least, I would not be too worried, in fact that would be one of the major themes that I would look for in the second half is rural India driving some of the demand growth assuming that the monsoon is not a total disaster..
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