RURAL DISTRESS
Budget 2024 may see Modi govt hiking rural housing subsidy by 50% following Lok Sabha disappointment
India plans a substantial increase in rural housing subsidies in the upcoming federal budget, potentially exceeding $6.5 billion, up by 50% from the previous year. This initiative aims to address rural economic distress and boost infrastructure spending including village roads and job programs, amid challenges in the agriculture sector and recent electoral setbacks for Prime Minister Narendra Modi's party.
Green shoots of rural recovery? Bet on these 3 sectors, says Jyotivardhan Jaipuria
Jyotivardhan Jaipuria says both the largecap and the smallcap segments look attractive. In areas where the capacities are in place, where they are running at low utilisation, if demand recovers, then huge operating leverage can be made, those are the companies which we are really focusing on.
ETMarkets Smart Talk: Why FIIs are turning net sellers in Indian markets and it not because of election jitteriness, explains Niraj Kumar
While the incumbent government securing its third term bodes well for market stability, it does juxtapose them with some dependency on allies for imperative policy decisions.
FMCG and consumer durables poised for growth : Trideep Bhattacharya
I think the market has taken comfort over the last few days since the election result has come out, until yesterday that the ministries have been announced that broadly speaking the policy directive is likely to remain the same.
Rural jobs, roads, housing next on government radar
The government plans to construct 30 million houses under PMAY and is focusing on addressing rural distress to boost growth in private consumption expenditure and household savings.
Focus and execution will increase on affordable housing: Prashant Thakur
Now, the definition of affordable needs to be increased. There were certain incentive that have been rolled back. So, these are the demands which were unmet and I strongly believe that with this government coming back in power the focus will be there and we will see an overall spurt in affordable housing which was lagging significantly.
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Harsh Gupta Madhusudan on key indicators to monitor ahead of Budget
I think that there should be some more not exactly freebies or welfare, but something more attuned towards consumption and we were already seeing that even in the financial markets. I gave you the number of top line, the most obvious data point to check directly FMCG sales.
Modi 3.0: How different will be the third Modi government
Narendra Modi is scheduled to take take oath for the third term as India's Prime Minister in a changed political landscape. Allies demand concessions, potentially affecting economic agenda. Expectations for populist budget with focus on welfare and rural areas, though concerns raised over economic impact. Reform agenda may face challenges due to weakened mandate, but continuity likely in infrastructure investment and business environment improvements.
Rural vote fall cost Modi a decisive election win
In last month's election, BJP lost a third of its rural parliamentary constituencies, reflecting rural discontent over lack of jobs and high inflation. This cost the ruling party its majority in parliament, forcing Modi to rely on regional allies to govern. The BJP retained only 126 of the 201 rural seats it previously held. Issues like rural distress and economic disparities were cited by voters.
Rural demand theme blooms
Investor money is shifting to defensive shares like FMCG, healthcare, and information technology following the lower-than-anticipated seats for the BJP in recent elections. Marico, Godrej Consumer, Nestle India, ITC, Britannia, HUL, and Dabur saw significant gains. The Nifty and NSE FMCG Index also rose.
General elections 2024: A weaker mandate to impel policy reset
The underwhelming election results reflect voters' focus on economic and livelihood issues over free-food distribution. The need for productive employment is becoming a dominant necessity in policy considerations.
Should market worry about whether policy continuity is here to stay or not? Swaminathan Aiyar explains
And I would say managing the coalition again becomes much easier if you stick to continuity. If you want to have sudden changes of policy, various people can have objections because any sudden change of policy creates losers and politicians hate to have the losers, even if there are going to be winners later on.
BJP-led NDA's narrow majority shifts focus to rural spending and increased private investments
The recent election results in India saw the ruling BJP-led NDA secure a majority, though narrower than expected. A Bernstein report predicts increased focus on direct social schemes, especially in rural areas. Private sector investments are expected to drive the capex cycle, with implications for economic growth and market dynamics. Market volatility is anticipated due to policy uncertainty, while financials remain a key sector.
New govt likely to vote for populism in budget
With the Lok Sabha election results hinting at a coalition government, economists anticipate a populist Budget focusing on welfare schemes for the upcoming fiscal year.
Only wave is the heatwave
Coast to coast, cutting across Andhra, Telangana, Karnataka and Maharashtra, local issues are driving the chatter & the voter. That’s not the best news for BJP
Bundelkhand battleground: How is BJP combating anti-incumbency here
Bundelkhand: Amidst murmurs of anti-incumbency in Bundelkhand, the BJP is deploying a unique strategy centred around ration distribution and effective governance to maintain its stronghold in the region. With projects like Har Ghar Nal and Bundelkhand Industrial Development Authority (BIDA) gaining traction, the BJP aims to counter opposition challenges and secure victory in the upcoming elections.
MGNREGS: Tamil Nadu, Bihar — two strange stories from book of job
Tamil Nadu and Bihar are a study in contrast, admit senior government officials and experts. Over the past five years, Tamil Nadu accounted for 10-15.3% of the country's annual work demand submitted by individuals, under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), while Bihar made up just 4-5.7%, according to the rural development ministry data.
Demand under rural jobs scheme seen 27% lower in FY25
The rural development ministry has pegged the 2024-25 person-day generation target (called labour budget) at 2.21 billion under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), down 27% from the actual level in the previous fiscal.
Is 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.
Core inflation to stay around 3% till Q1 FY25: Economists
Inflation in goods and services other than fuel and food is expected to remain low at around 3% due to weak rural demand. Despite a strong economy, depressed wage growth and muted private consumption have contributed to declining core inflation.
Increased female participation in workforce implies prosperity, not distress
Had distress been driving poor people to work, FWPR would have risen fastest for the poorest deciles of the rural population. In fact, rise has been slowest for the poorest decile, from 16.5% to just 19%. It has risen fastest for the top two deciles, from 19.4% and 19.9% to 32.6% and 33.5%, respectively. This is encouraging.
Rural distress? Where?
The narrative of deepening rural distress is flawed and relies on misconstrued data about wage growth. Comparisons between different time periods fail to consider the context and statistical nuances. Nominal wage growth during the last two decades has been significant, with average wages more than doubling in the current regime. However, interpreting this data as a sign of rural prosperity overlooks important factors.
All things rural India, uneven economic growth: FM Sitharaman's Budget & economy perspective in-depth
Nirmala Sitharaman has been spearheading the economic management of the Modi government during its second term. Following the presentation of her consecutive 6th budget, she mentioned that the government deliberately refrained from addressing issues in fragments during the vote on account and chose to wait until the full budget in July for a comprehensive approach. The FM expresses confidence that the Indian economy is set to maintain its growth trajectory, and the govt is poised to effectively control inflation.
Budget 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.
Softer growth in central & state capex seen; construction to support rural incomes next couple of years: Pranjul Bhandari, HSBC
Pranjul Bhandari of HSBC predicts that in FY25, both central and state government capex will grow at a slower clip. However, this slowdown may not be negative for growth as the central bank is expected to implement looser monetary conditions. Bhandari suggests that the central bank will ease liquidity, which can effectively act as a rate cut of about 40 to 50 basis points. While the rural economy has faced challenges, the construction sector has provided an alternate source of income for rural Indians
ETMarkets Smart Talk: Interim Budget 2024 could see tax relief measures to boost consumption & investment: Sonam Srivastava
The upcoming Budget 2024 or Vote on Account is anticipated to focus on tax relief measures, infrastructure projects, agriculture, rural development, and fiscal discipline. Sectors such as FMCG, healthcare, construction, cement, steel, public sector banks, green energy, EMS, railways, defence, packaging, and ESG are likely to receive attention. Investors should watch for government spending priorities and policy direction, as well as global uncertainties and interest rates.
Siddu meets Modi, seeks Rs 18,177 cr to mitigate farm sector distress in drought-hit Karnataka
Chief Minister Siddaramaiah on Tuesday urged Prime Minister Narendra Modi to release Rs 18,177 crore to battle a crisis arising out of drought in Karnataka. The CM, along with state revenue minister Krishna Byre Gowda, met the PM in Delhi and submitted a memorandum highlighting that out of the 236 taluks, 223 had been hit by drought, with 196 of them severely affected.
Erratic rains force farm labour to stick to NREGS
The demand for work under the government's rural job scheme, MGNREGS, has seen an unusual trend this fiscal year. While demand usually peaks in the summer months, it has grown rapidly during the monsoon season. Experts believe that erratic seasonal rains have prevented rural workers from migrating to farming, leading them to rely on the MGNREGS for employment.
Auto sales point to distress in rural India even before El Nino arrives
Two-wheeler retails in FY23 fell to a seven-year low and tractors saw the slowest growth pace among all peers, reflecting inflation’s adverse impacts on rural India. Select segments like two-wheelers and tractors will be key monitorable in the coming months, with the IMD predicting above-normal temperatures from April to June across most parts of India, except northwest and peninsular regions.
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