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New Delhi: The <keyword id="20072894" type="General" weightage="20" keywordseo="rural-economy" source="keywords">Rural economy</keyword> of <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> has emerged as a significant driver of <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>, outpacing urban areas largely due to increased <keyword id="20155204" type="General" weightage="20" keywordseo="government-spending" source="keywords">government spending</keyword> in the recent quarters, highlighted a report by <keyword id="20548750" type="General" weightage="100" keywordseo="Anand-Rathi" source="keywords" meta.keywordsubtype="org" meta.entityname="Anand Rathi" meta.hostid="153" meta.entityid="Anand Rathi">Anand Rathi</keyword>, a financial service company. "<keyword id="20109648" type="General" weightage="20" keywordseo="rural-india" source="keywords">Rural India</keyword> continues to outpace urban areas in growth, largely due to a significant rise in government spending in rural regions in the last quarter," said the report. For the coming months, the report stated that the growth trend in the rural economy is expected to continue, although a moderation in growth may occur. It also added that the favourable monsoon conditions and improved sowing data are anticipated to sustain the upward trajectory in <keyword id="19931574" type="General" weightage="20" keywordseo="rural-demand" source="keywords">rural demand</keyword>, providing a buffer against potential economic uncertainties. "We expect this growth to moderate following the elections, favourable monsoon conditions and improved sowing data should sustain the upward trend in rural demand". The report also highlighted that the government's ambitious capital expenditure plans, amounting to Rs 11.1 trillion, are expected to stimulate infrastructure development, further enhancing rural economic prospects The rural economy plays a crucial role in the development of the country because a majority of the population still resides in rural areas. As per the Economic Survey of 2022-2023 around 65 per cent of India's population lived in rural areas in 2021. The report also highlighted that India stands out among emerging economies due to its strong GDP growth. Last year, India grew by more than 8 per cent, and the <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="153" meta.entityid="RBI">RBI</keyword> expects a 7.2 per cent growth rate for FY25. The financial outlook is positive, with efforts to cut the fiscal deficit to 4.5 per cent. The report also noted that India's credit rating may improve because of the strong tax revenue and a large dividend from the RBI which will lead to a lower fiscal deficit than expected. "The fiscal outlook appears promising, with continued focus on reducing the fiscal deficit toward the 4.5 per cent target. Strong tax collections and a substantial RBI dividend may enable the fiscal deficit to come in lower than expected, which could potentially lead to an improved sovereign rating" said the report.

Rural economy is driving India's growth, Govt capex in infra will stimulate it: Anand Rathi report

New Delhi, Feb 4 (IANS) Focus on the rural economy in the budget has been waning over the years and in such a scenario a revival of the rural economy would take time, <keyword id="45949" type="General" weightage="100" keywordseo="jm-financial" source="Orion">JM Financial</keyword> said in a report. In the absence of a specific focus on the rural economy in the <keyword id="6360189" type="General" weightage="50" keywordseo="union-budget" source="Orion">Union Budget</keyword> for 2023-24, analysts don't see immediate triggers for revival in the rural economy. Moreover in the absence of specific or enhancement of allocation towards the rural economy, we believe that the rural environment would have to revive on its own. Hence we would view businesses dealing with price sensitive low ticket items as less likely to benefit, JM Financial said. An attempt is made to make the new tax regime more attractive after getting a low response in FY23, however we believe the benefits in the form of tax saving on enhanced no-tax limit (INR 0.2mn) is unlikely to spur demand in a meaningful manner, JM Financial said in a report. Unlike the anticipation by a section of the market, rural focus was missing in the budget announcements. The expectations of a populist budget was linked to 9 state elections in 2023, moreover with FY24 being the last full year budget before the general elections in CY24. However, we believe that the schemes relating to empowerment of women <keyword id="75772" type="General" weightage="50" keywordseo="self-help-groups" source="Orion">Self Help Groups</keyword>, artisans and setting up of digital infra for agriculture and farmer centric solutions would provide opportunities in the rural economy to improve their livelihood, JM Financial said. Moreover, the budgetary allocation towards rural centric schemes like <keyword id="6361863" type="General" weightage="50" keywordseo="mgnrega" source="Orion">MGNREGA</keyword> and PM <keyword id="865803" type="General" weightage="50" keywordseo="gram-sadak-yojana" source="Orion">Gram Sadak Yojana</keyword> has been declining ever since FY22. Even the sentiments as collated by CMIE show a declining trend in the rural economy ever since June '22 whereas the sentiments in the urban economy seem to be holding up well, JM Financial said. In the absence of a specific focus on the rural economy, we don't see immediate triggers for revival in the rural economy, the report said. The latest rabi sowing has been progressing well even on a higher base of last year, except in the case of wheat. Subsidy burden has been the major pain point in India's fiscal, led by rising fertilizer and food prices. Fertilizer subsidy was increased by INR 1.1tn in FY23 over and above the budgeted figures of INR 1.05tn. Allocation towards fertilizer subsidy has been made to the extent of INR 1.75tn in FY24. We believe with easing inflationary pressures, the government could have limited the allocation to INR 1.4tn, as fertilizer prices have moderated by 40% from its peak. However, the geo-political situation is still in a flux and the government's higher allocation seems prudent at this juncture. Food subsidy has been pegged at INR 1.97tn (vs INR 2.9tn FY23RE), as the outlay would be reduced with the discontinuance of the PM Garib Kalyan Yojana. On an overall level, subsidies form 1.2% of GDP vs 1.9% in FY23RE. Past data indicates that the exuberance or otherwise relating to the budget day normalizes within a month in the equity markets. Moreover, a substantial positive performance in Nifty was witnessed in the week following the budget day only during FY16, FY20 and FY21. The personal income tax changes in the Union Budget affect many but the impact is low, Credit Suisse said in a report. The split of salary income by income groups shows that while the number of filings is mostly by low-income groups, the bulk of the taxes come from high income. 56% of the filers belong to the low-income group but they add to just 2% of the tax collected. People earning more than Rs 10mn are less than 1%, but they add to 10% of the tax collected, the report said. Inflows from small savings deposits have shrunk considerably. Small saving deposits for government have been declining, and at the current pace, can be 20% YoY lower for FY23. This may still be marginally better than budgeted, though these flows are generally larger nearer to the year-end. While bank deposit rates have risen considerably, NSSF rates remained low for most of FY23, were raised in Jan-2023. The Centre continues to remain dependent on small savings flows to fund the deficit, Credit Suisse said.

Revival of rural economy to take time in the absence of triggers: JM Financial

Nobel Peace Laureate <keyword id="83501" type="PERSON" weightage="20" keywordseo="Muhammad-Yunus">Muhammad Yunus</keyword> on Saturday said building rural economy is important to stop migration amid the challenges caused due to coronavirus pandemic. "Micro credit is about building rural economy. Corona crisis has given the industry an opportunity to aid in creating a strong rural economy. Creating a strong independent rural economy will not only halt rural to urban migration but in the years to come, the migration will be urban to rural," Yunus said at a webinar by <keyword id="477100" type="ORGANIZATION" weightage="20" keywordseo="microfinance-industry">microfinance industry</keyword>. Microfinance institutions should create programmes like venture capital to create entrepreneurs in rural India, he said. There is a need for creating a national disaster fund for the sector and managed by the sector in India, Yunus said while speaking in the webinar organised by Sa-Dhan, a self regulatory organisation for the industry. Notably, India has been witnessing reverse migration of labourers and workers to their home states as lockdown imposed due to coronavirus pandemic affected them badly economically alongside huge number of job losses as well. SEE ALSO: <a href="https://www.businessinsider.in/india/news/with-233-fresh-cases-bihars-covid-19-tally-rises-to-4831/articleshow/76238545.cms">Bihar registers 233 new coronavirus cases with its overall tally rising to 4.831</a> <a href="https://www.businessinsider.in/india/news/noida-21-new-covid-19-cases-tally-591/articleshow/76238339.cms">Noida’s total coronavirus cases hit 591 with 21 new cases detected in the past 24 hours</a> <a href="https://www.businessinsider.in/india/news/342-new-coronavirus-cases-in-pune-district-six-deaths/articleshow/76239001.cms">Six more people die of coronavirus in Pune with 342 fresh cases</a>

Nobel Peace Laureate Muhammad Yunus says building the rural economy is the key to halt migration

Next time you take a trip to ‘experience’ the countryside or buy handicraft items to empower the poor artisans from rural <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>, you should be aware of the fact that the equation is bound to change someday. Very soon, the urban <st1:country-region w:st="on">India</st1:country-region> might depend on the rural <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> to rejuvenate the deficient <keyword id="34412" type="ORGANIZATION" weightage="40" keywordseo="economy">economy</keyword>. And no, we ain’t kidding this time. 
	 

	For one, corporate houses are creating specific advertisements for rural areas, which are close to their cultural identity, as against the blanket ads found in urban <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> and more specifically, in metros and cosmopolitan cities. In fact, villages, with their developmental index rising steadily, are giving tier II cities a run for their money as prospective business and industrial hubs. And they have also become the most unexpected and unusual contenders on the consumer index.<o:p></o:p>

	 

	It is a slow yet steady trend that has been gaining ground over the past few years. According to a CRISIL report, rural <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> spent Rs 3,750 billion ($67,144 million), as against Rs 2,994 billion ($53,607 million) spent by the urban population between 2009-10 and 2011-2012. The data was collated by the National Sample Survey Organisation (NSSO), to be later used by CRISIL in its report. The NSSO survey also noted that per capita rural consumption grew 19% annually while the urbanites had to be content with 17% growth per year.<o:p></o:p>

	 

	No wonder you see a watch company leveraging the Kumbh Mela for its marketing strategy or a toothpaste company using popular cultural forms such as puppetry and traditional music for business promotion. The urban populace may perceive it as nostalgia but for rural consumers, it means relating to a product in their own language and as per their cultural parameters. It is more like bringing the companies to their doorsteps and making them go down on their knees because rural <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> has the buying power. After all, the power of buying dictates everything else, even the way a company creates or changes its marketing policies.<o:p></o:p>

	 

	The headway urban <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> had made over the past few decades in overtaking the rural segment in terms of earnings and spending has changed significantly from the beginning of the current decade. <o:p></o:p>

	 

	According to experts, the current growth in rural consumption is due to a number of reasons. One of the key factors is the rise in non-farm job opportunities which were beyond the purview of the market-based economy that dominated the agrarian society’s equations till now. To sustain this rural boom, it is critical to substitute short-term income-boosters (government-backed poverty eradication and self-reliance programmes) with empowering job opportunities.<o:p></o:p>

	 
 <keyword id="48085" type="CITY" weightage="40" keywordseo="Credit-Suisse">Credit Suisse</keyword> Research Institute’s Emerging Consumer Survey (2014) also points out that <keyword id="6355185" type="ORGANIZATION" weightage="80" keywordseo="rural-india">rural India</keyword> is riding other modes of income generation to come to the forefront of the country’s overall developmental index. As per the report, the ‘rural rising’ is taking place in the world’s two most ancient countries, India and China, who happen to be neighbours and the world’s biggest emerging economies, with future markets focusing on them. What’s more, both countries live in their villages, battling issues such as migration from rural to urban areas in search of opportunities, jobs and education.<o:p></o:p>

	 

	The popular image of an Indian village is that of one without electricity, safe drinking water and hygienic conditions. But things have changed in most of the villages, thanks to the government’s aggressive programmes to reduce poverty.<o:p></o:p>

	 

	The reports also point out that the developmental index has actually tilted in favour of rural areas, which have been showing great appetite for consumer products. When asked whether they would spend more money on what’s considered luxury in their context, such as bottled water or holidays or the next smartphone, majority of the rural Indians said they certainly would not mind spending on these. The respondents also said that all the 14 ‘luxury’ items shortlisted by the survey would be on their purchase list in the years to come. <o:p></o:p>

	 

	The access media has provided to these items considered ‘essential’ is something phenomenal despite their limited reach. For example, the number of people who owned TV sets increased to 42% in 2009-10 as against 26% just five years earlier. Clearly, the consumption pattern in rural <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region> is shifting from necessities to discretionary goods. <o:p></o:p>

	 

	Needless to say, product-line companies are changing strategies accordingly. Earlier, urban <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> was high on their marketing budget – as much as 70% of the budget was reserved for marketing in urban areas and a mere 30% for rural markets. But the equation has turned topsy-turvy now. Today, major companies reserve 55% for urban areas and about 45% for rural areas.<o:p></o:p>

	 

	The great Indian equalisation has begun. And rural <st1:place w:st="on">India</st1:place> is getting the big slice of this pie!<o:p></o:p>

Rural Rising In India: Will Villages Dominate The Consumer Market?

One of China's long-term economic plans is to get its workers out of rural areas and <a href="http://www.economist.com/news/china/21640396-how-fix-chinese-cities-great-sprawl-china">into cities</a>.This is part of China's larger, overall goal of transforming the country's economy into a services-based, consumer driven economy. Ultimately, the government wants to get about <a href="http://www.nytimes.com/2013/06/16/world/asia/chinas-great-uprooting-moving-250-million-into-cities.html?pagewanted=all">70% of its population</a> into cities.However, it seems like China may actually be on the edge of a <a href="http://www.bloombergview.com/articles/2016-01-25/china-s-migrants-go-home-and-stay-there">reverse migration</a>, as many migrants are returning back home.Back in January, the National Bureau of Statistics <a href="http://www.shanghaidaily.com/national/Migrant-popultion-those-leaving-hometowns-to-live-elsewhere-decreases-1st-time-in-30-years/shdaily.shtml">reported</a> that the migrant population dropped for the first time in three decades in 2015 - by 5.68 million.<a href="http://www.bloombergview.com/articles/2016-01-25/china-s-migrants-go-home-and-stay-there">Bloomberg View's Adam Minter previously noted</a> that part of that drop can be attributed to economic reasons such as a deterioration in the manufacturing sector and an improvement in rural economies. However, he also suggested that people are moving back home for non-economic reasons, too, such as taking care of aging parents.Notably, in a monthly research note to clients, Deutsche Bank's Torsten Sløk shared a chart showing the percentage of rural migrants seeking jobs outside their hometown over the last 5 years.As you can see below, the percentage has dropped close to zero, down from about 5.5% in 2010.<div class="KonaFilter image-container display-table"><div><div class="image">Deutsche Bank</div></div></div>One notable consequence from China's reverse migration is that China's <a href="http://www.businessinsider.com/chinese-ghost-town-2016-1">ghost cities</a> may end up staying ghost cities for much longer, as <a href="http://seekingalpha.com/article/3965214-china-reversal-urbanization">Seeking Alpha's Pater Tenebrarum noted</a>.Still, although this reverse migration may not be in line with China's master plan, it's not necessarily a bad trend.As Bloomberg View's Minter <a href="http://www.bloombergview.com/articles/2016-01-25/china-s-migrants-go-home-and-stay-there">noted</a>:"It should help alleviate the overcrowding in China's biggest cities and the sharp income disparity between rural and urban areas. Returning migrants tend to be more worldly and wealthy than when they left, as well as more entrepreneurial: The number of people starting new businesses in rural China grew 3.1%, year over year, in the first half of 2015. In total, about 2 million migrants have returned home to start businesses."And, arguably, the more pressing demographic issue is China's <a href="http://www.businessinsider.com/china-demographics-problem-2016-3">enormous, aging population</a>, which, by 2050, will be approximately equal to the combined total projected populations of Japan, Germany, Australia, and Egypt. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/global-economy-biggest-threat-2016-4">FORMER GREEK FINANCE MINISTER: The single largest threat to the global economy</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="4wNWo1MzE6mCXkk1XHZUEjn1PYYwkNot" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

China's master plan to change its economy is hitting a snag

<keyword id="6391015" type="UNKNOWN" weightage="20" keywordseo="Finance-Minister-Arun-Jaitley">Finance Minister Arun Jaitley</keyword> is likely to announce a host of incentives for rural economy during <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword> on February 29. 
 
Jaitley wants to bring changes in agriculture policy as well as focus on being pro-poor. 
 The <keyword id="6356076" type="UNKNOWN" weightage="20" keywordseo="indian-economy">Indian economy</keyword>, presently, is harping on urban demand and very less from rural side. 
 
The finance minister will also give emphasis on de-risking agriculture as the country has already experience two consecutive bad monsoons. 
 
Various platforms such as Pradhan Mantri Jan Dhan Yojana, Atal Pension Yojana, etc will see more consolidation. 
 
The Food Security Act will also be infused with more funds. 
 
Priority will also be given to MUDRA and even the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) will be tweaked to help strengthen the country's irrigation system. 
 
(Image: Indiatimes)

Budget 2016: Jaitley to go pro-poor, de-risk agriculture

<ul class="summary-list"><li>A poll conducted by a <keyword id="6355624" type="UNKNOWN" weightage="60" keywordseo="rural">rural</keyword> super PAC found only half of rural voters credit <keyword id="6534156" type="UNKNOWN" weightage="60" keywordseo="Democrats">Democrats</keyword> with <keyword id="45304" type="COMPANY" weightage="60" keywordseo="Stimulus">stimulus</keyword> checks.</li><li>This is notable given that not a single Republican voted for <keyword id="60973" type="PERSON" weightage="60" keywordseo="Biden">Biden</keyword>'s $1.9 trillion stimulus.</li><li>A persistent feature of American <keyword id="6358883" type="UNKNOWN" weightage="60" keywordseo="politics">politics</keyword> is voters' failure to understand government's role in their lives.</li></ul>Americans have so far received three stimulus checks. The first two were distributed under President Donald Trump's watch and not a single Republican voted for the third round, and yet, only half of rural voters are giving Democrats the credit. A <a href="https://actionnetwork.org/user_files/user_files/000/059/832/original/RuralObjective_toplines.pdf">poll</a> conducted by Rural Objective PAC - a super PAC that works to build support for Democrats in rural areas - found that 50% of voters in rural areas associate providing COVID-19 stimulus checks directly to American families with the Democratic Party, while 32% associated the payments with Republicans, 11% with neither party, and 7% weren't sure."We're not connecting with these voters, even if we have great <keyword id="28351" type="ORGANIZATION" weightage="60" keywordseo="policy">policy</keyword>," JD Scholten, the executive director of the Rural Objective PAC, <a href="https://www.washingtonpost.com/opinions/2021/05/18/democrats-think-voters-will-reward-them-sending-checks-what-if-theyre-wrong/">told</a> Greg Sargent and Paul Waldman of The Washington Post, which previously reported on the poll's findings.The poll surveyed 2,149 voters in nine battleground states - Arizona, Georgia, Iowa, Kansas, North Carolina, Ohio, Pennsylvania, South Carolina, and Wisconsin - and while 68% of those voters support stimulus checks, it's clear that Democrats aren't getting credit for a cornerstone of President Joe Biden's American Rescue Plan.The majority of rural voters did associate Democrats with extended unemployment benefits and state aid, though, and even as Democrats are calling for recurring stimulus aid, voters are not associating the already provided aid with Democrats. Biden's $1.9 trillion stimulus plan passed using budget reconciliation without a single Republican voting for the plan, which included $1,200 checks. It's true that the first two checks occurred under Trump, since he signed a $1,400 check and a $600 check into law as part of his pandemic aid efforts, although he signed both of those while Democrats controlled the House under Speaker Nancy Pelosi.Some Democratic lawmakers are also <a href="https://www.businessinsider.com/stimulus-payments-permanent-recurring-checks-democrats-universal-basic-income-2021-4">calling</a> to make stimulus checks permanent - something that has received broad support from both Republican and Democratic voters given that it would cut the number of Americans in poverty in 2021 from <a href="https://www.businessinsider.com/more-stimulus-checks-help-fight-poverty-economic-security-project-2021-4">44 million to 16 million</a>. Twenty-one Democratic senators urged Biden in a <a href="https://s3.amazonaws.com/s3.boldprogressives.org/images/033021_Automatic_Stabilizers_Letter_Final.pdf">letter</a> to include recurring direct payments in his $4 trillion infrastructure plan and said that "a single direct payment will not last long for most families, and we are worried about the cliff facing unemployed workers when the unemployment insurance extensions expire on September 6."But voters not knowing who to credit for certain policies is nothing new. When former President Barack Obama was attempting to reform the healthcare system over a decade ago, <a href="https://talkingpointsmemo.com/news/obama-pokes-fun-at-don-t-touch-my-medicare-people">many voters</a> don't want the government to interfere with their Medicare when Medicare is, in fact, a government-run program."I got a letter the other day from a woman. She said, 'I don't want government-run health care. I don't want socialized medicine. And don't touch my Medicare,'" President Barack Obama said at an AARP-hosted <a href="http://www.talkingpointsmemo.com/livewire/2009/07/transcript-obama-aarp-hold-health-care-town-hall.php">town hall</a> on healthcare in 2009. "I wanted to say, you know, that's what Medicare is: a government-run health care plan that people are very happy with."The Washington Post separately <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072703066_2.html?hpid=topnews&amp;sid=ST20090727031073107">reported</a> in 2009 that a rural voter told South Carolina Rep. Robert Inglis to "keep your government hands off my Medicare," to which Inglis had to explain to the voter that his healthcare was provided by the government.As Scholten told the Post, if there's one thing that Democrats could use to win support of <keyword id="3830395" type="ORGANIZATION" weightage="60" keywordseo="rural-america">rural America</keyword>, it would be direct payments."This was one of the biggest investments we've seen in rural America since the New Deal," Scholten told Sargent and Waldman. "It's good policy. It should be good politics, too, but right now Democrats aren't taking advantage of it."

Only half of rural voters know that Democrats voted to send them stimulus checks, new poll finds

New Delhi, Feb 1 () The FMCG industry, facing a consumption slowdown, on Saturday welcomed the Union Budget saying that proposed reduction in personal taxes would help drive consumption and the thrust on rural development would revive demand from the segment.
 Companies like Godrej Consumer, Dabur, Britannia Industries, Marico and Jyothy Labs said the special thrust on agriculture, irrigation and rural development should fuel growth in a struggling rural economy, where FMCG growth has slowed down.
 "The Union Budget attempts to activate multiple levers like rural, infrastructure, entrepreneurship and financial sectors to stimulate growth. It remains to be seen which of these will fire and to what extent. We are optimistic about the government's rural agenda and hope that it buoys consumer demand for the FMCG sector," Britannia Industries MD Varun Berry said.
 Terming it as "incremental budget", Dabur India CEO Mohit Malhotra said the government continues to focus on farmers' income and is offering significant sops at the lower end of the spectrum, which will enhance the purchasing power of the consuming class.
 "The big positive takeaways from this year's Budget would be the income-tax relief offered to lower income groups by slashing income tax rates and rejigging income tax slabs to reduce total tax payable by individuals. This would definitely put more disposable income in the pockets of the consuming class, particularly the middle class, which may help push demand for consumer staples," he said.
 However, Malhotra added that "big bold steps" needed to restart economic growth are missing.
 "That said, the fact remains that the government had little room for manoeuvre," he added.
 According to Godrej Consumer Products MD and CEO Vivek Gambhir, expectations from this budget were very high, and it has partially delivered.
 "The positive is that it recognises that spurring consumption is clearly the need of the hour. Some of the measures being introduced should help improve consumer demand incrementally this year in both rural and urban India," he said.
 Gambhir added:" Focused efforts to improve agricultural productivity, together with better target subsidies, are summed up in a 16-point action plan. This should relieve stress in the agrarian economy and boost rural growth prospects for FMCG."
 However, he added that it will take much more to achieve the target of USD 5 trillion economy and double farmer income by 2022.
 "The real litmus test will be the introduction of deeper structural reforms and the timely disbursement and effective on-ground translation of a clear roadmap of change," said Gambhir.
 Expressing similar views, Marico CFO Vivek Karve said, "Reduced personal taxes auger well for consumer goods companies as more disposable income will help drive consumption of branded goods."
 Jyothy Labs Joint Managing Director Ullas Kamath said the Budget seems to be a "sincere attempt" in boosting the much needed demand scenario in both rural and urban economy.
 "The announcements related to revising individual tax structure, proposed 16-point action plan for agriculture and farmers' welfare coupled with the strategy to doubling farmers' income by 2022 is the step in the right direction. We expect overall impact of the budget will boost consumption and revive consumer sentiments," he said.
 According to Parle Products Senior Category Head Mayank Shah, the budget was the "most anticipated one" due to last year's economic depression which burdened many sectors.
 "FMCG has been facing headwinds due to stagnating rural demand. This budget will surely increase the discretionary spending and FMCG will be one of the biggest beneficiaries. The provisions announced by Finance Minister on revision in direct taxation for lower personal income tax liabilities along with emphasis on targeted measures for boosting rural economy will have a twin positive impact on FMCG," he said.
 Emami CFO N H Bhansali said: "Expectation from the Union Budget were not very high, in view of the fact that few important steps have already been taken by the government like the reduction in corporate tax prior to the budget.
 "Looking at the current market scenario, where growth has slowed down, the focus is on stimulating growth rather than fiscal discipline. Accordingly, the Finance Minister has announced many steps for furtherance of agriculture, commerce, industry, services and exports," he said.
 CG Corp Global Executive Director Varun Chaudhary said that mass market brands will benefit post budget as the middle class will have more money in their hands post the income tax reduction.
 "Better agricultural output combined with urban middle class having more money in their pockets will help discretionary food categories," he said. KRH ABM

FMCG industry welcomes Budget, says reduction in I-T slabs to drive consumption

<ul><li><keyword id="6354561" type="PERSON" weightage="20" keywordseo="ram-nath-kovind">Ram Nath Kovind</keyword>, the President of India, made a significant announcement as he inaugurated the new Parliament session. </li><li>Government is set to invest ₹25 trillion to enhance agriculture productivity in coming years, ₹900 billion expenditure to be incurred annually in PMKSN. </li><li>The announcement has come just a few days before the upcoming budget. </li></ul>The Indian government is planning to infuse as much as ₹25 trillion into the agriculture sector in the coming years. This was not announced by Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> or anyone from his government. It was President Ram Nath Kovind who took the lead as he inaugurated the proceedings for the new Parliament session. “ Large scale investments have been made to strengthen rural India. In order to enhance agriculture productivity, an investment of Rs. 25 lakh crore will be made in the coming years.”said President Ram Nath Kovind It is also planning to spend ₹900 billion on its flagship scheme Pradhan Mantri Kisan Samman Nidhi (PMKSN), Kovind said on Thursday <a href="http://pib.nic.in/PressReleseDetail.aspx?PRID=1575025">addressing</a> the joint sitting of the parliament. An amount of ₹120 billion <a href="http://pib.nic.in/PressReleseDetail.aspx?PRID=1575025">has already been disbursed</a> to the farmers in three months through the scheme, he added. The country is reeling under a sharp slowdown in the economy as well as a crippling water crisis, and both factors have had a more pronounced impact on the rural economy. The Modi government had set itself a goal to double farmers’ income by 2022 but <a href="https://www.downtoearth.org.in/news/agriculture/half-way-doubling-farmers-income-is-a-distant-dream-62983">reports</a> suggest that the progress has much left to desire. But, the President’s speech today may have be a sign for investors in India for what the upcoming budget on July 5 may have in store. “To double the income of farmers by 2022, several steps have been taken in the last 5 years. Be it the decision to increase the minimum support price (MSP), or approval for 100 percent FDI in food processing; be it completion of the irrigation projects pending for decades or extension of Crop Insurance Scheme; be it the Soil Health Card or 100% Neem coating of urea.”said President Ram Nath Kovind Kovind also prodded the government to set up a separate department for integrated development of fisheries and to create a special fund to usher in, what he called, a ‘Blue Revolution’.

Indian President just took the lead ahead of the budget to announce a ₹25 trillion fund to save rural economy

There were several key messages from the budget this year, but the three which seem to stand out are in the areas of boosting infrastructure growth, reinvigorating rural demand and the rebooting financial sector. 
 
For boosting infrastructure, the roads sector is given an unprecedented Rs 97,000 crore of investment allocated in this year's budget. It is expected to have a multiplier effect on the economy in the coming years and help in efficient transportation. This along with the Rs 1.21 lakh crore CAPEX in railways seems to be a major thrust of the union government going ahead. 
 
The government is expected to approve 10,000 km of National Highways in Fiscal 2016-17 apart from the plan to upgrade 50,000 Km of state highways to national highways. 
 
Apart from this, the move to develop airstrips of AAI in some of the towns in India is another positive step concerning infrastructure. Similarly, the plan to reinvigorate PPPs in infrastructure is also a positive one which may help private sector step in for some investment. 
 
Second, for reinvigorating rural demand two related sectors have been targeted. One is the agriculture sector which has seen two back to back seasons of scanty rainfall. For the farmers in the sector, the announcement of a Fasal Bima Yojana will provide relief. And so will the move to create irrigation infrastructure through the strengthening of the Pradhan Mantri Krishi Sinchai Yojana over the long term. 
 The creation of the e-platform for farmers to sell their produce in wholesale markets across the country will aid in more freedom to the farmers to sell their produce. The change in the APMC Act in 12 states about the same is a progressive step. For the rural sector, which is the second sector, the structural step to give more funds to Panchayats and Municipalities (Rs 2.87 lakh crore) as per the recommendations of the Fourteenth <keyword id="74136" type="ORGANIZATION" weightage="20" keywordseo="finance-commission">Finance Commission</keyword> is taken. It is an appropriate step as it will lead to a massive devolution of funds to the third tier of governance. Similarly, the steps for development of urban clusters for market access and job generation will aid in strengthening the rural economy in the long term. The substantial allocations to MGNREGS (Rs 38500 crore) and the rural sector overall (Rs 87,765 crore) underlie the impetus that is being given to rural economy and demand in the sector. 
 
Third, another major focus area for the budget has been addressing the challenges of the financial sector. The introduction of the comprehensive Code on Resolution of Financial Firms in Parliament, as well as the code on Bankruptcy when enacted, will help in resolution as well as help bring in more accountability in the financial system. Also, the PSU banks have been facing problems due to asset quality and rising NPA. 
 
In addition to the comprehensive INDRADHANUSH already being implemented, the budget has done well to provide an allocation of Rs 25,000 crore for the recapitalisation of PSU banks. Also, the motivation to solve people's problem at the retail level are worth mentioning. These include the intent to tackling the issue of illicit deposit taking schemes as well as the intent to provide better access to financial services in rural areas through the rollout of ATM's and Micro ATM's over the next three years. 
 
Apart from these broader sectors other things where the government has done well at the macro level include sticking to the fiscal deficit target of 3.9 percent and 3.5 percent for the years 2015-16 (R) and 2016-17 (B) respectively. 
 
The government has also announced a committee to look into the FRBM Act, 2003 which is a good thing considering that market conditions in India are different than they used to be in the past. On the personal tax front, not much is seen for the middle class and the EPF taxation seems to be a negative move that has seen some visible backlash on social media. Another negative on the personal front seems to be on duties on several items where almost everything seems to get expensive from jewellery to cars to mobile phones to air travel. The only thing that is getting cheaper it seems are shoes and footwear. All in all the budget seems to be good for the rural economy and infrastructure sector and seems to take care of the financial sector problems at hand but leaves much to done for the middle class. 
 
 
(The article is co-authored with Sankalp Sharma, Senior Researcher at the Institute for Competitiveness, India. Amit Kapoor is Chair, Institute for Competitiveness &amp; Editor of Thinkers. The views expressed are personal. Amit can be reached at <a href="mailto:amit.kapoor@competitiveness.in">amit.kapoor@competitiveness.in</a> and tweets @kautiliya)

Three key things that standout from other measures in Budget 2016

<ul class="summary-list"><li><keyword id="1000048" type="PERSON" weightage="60" keywordseo="Clownfish">Clownfish</keyword> <keyword id="6386447" type="UNKNOWN" weightage="60" keywordseo="farming">farming</keyword> has taken off in <keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword> as the government tries to support rural economies.</li><li>We visited a clownfish hatchery where dazzling new varieties of "designer" clownfish are being bred.</li><li>Some of these clownfish sell for as much as $40 apiece.</li></ul>

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