Mention rural India and it conjures up images of a populace predominantly occupied in agriculture. However, that is hardly the case as the economic scenario has completely changed in the past few decades.
There are now structural and cyclical factors at play that make a case for bringing the rural theme to the investment foreground.
India라이브 바카라 rural population is 92 crore, contributes 46% of the country라이브 바카라 GDP and accounts for 50% of the nation라이브 바카라 consumption. Agriculture accounts for 16% of India라이브 바카라 GDP.
Better road connectivity, housing for all, complete electrification of villages, provision of sanitation and water access, financial inclusion through bank accounts for households, increased mobile penetration have boosted rural India라이브 바카라 economy. Rural spending has changed positively towards discretionary category away from food and cereals.
In recent years, the government라이브 바카라 emphasis on manufacturing, which also benefits rural areas, the recovery in rural wages after the challenges of COVID, and increased welfare spending by the Centre and States have all emerged as significant positives for rural regions as a whole.
Positive drivers at play
In the 15-odd years from FY09, road connectivity to rural habitations has risen from 58% to 99%, thus leading to better access to agricultural markets, increased demand for fertilizers and improving job prospects for the rural population.
All the villages in India are electrified, leading to greater use of electrical machinery, increased demand for consumer durables and productivity boost for local vendors.
Literacy rate has more than doubled in 30-odd years to 73.5% in 2023, leading to better jobs, improved skills, reduced poverty, greater financial and digital inclusion, and the ability to operate ecommerce platforms. Almost 90% of rural households have bank accounts.
The results of these changes have been encouraging. Non-agriculture segments contribute to over 40% of rural employment, nearly double the levels 30 years ago.
Rural per capita income has risen over 8X in the past 25 years to $2058 in 2024.
Non-food (discretionary) spending in income is now 53.6%, up from 40.6% in 1999-2000.
There are 534 million rural wireless subscribers currently.
The rural market for FMCG products is set to touch Rs 16.34 trillion by 2025. Up to 20% of consumer durable sales is expected to come from villages this year.
Some of the other rural indicators that are positive include improved water storage this year, traction in Agri exports, increased demand for labor outside MGNREGA, and higher Agri output prices.
Cyclical factors are positive as well. Real rural wage growth, which were in the negative from FY20-FY23, are positive in FY24 and YTDFY25 (till August).
In the budget for 2024-25, the gross allocation to the Rural Development ministry is Rs 2.82 trillion, much higher than the previous fiscal.
The 12 large States’ yearly spending on recurring welfare schemes is at a whopping Rs 3.16 trillion per year, which represents 1.1% of the country라이브 바카라 GDP.
With 11 States set to go to the polls in the next couple of years, announcement of more welfare programs targeted at rural areas would be beneficial in increasing demand.
The opportunities in the rural theme are thus not narrow, but are quite broad-based.
Power generation, automobiles and auto components, cement, banks, FMCG, consumer durables, Agri processing, fertilizers, insurance, personal care, footwear, construction materials and media & entertainment are some rural growth beneficiaries.
