Top 10 Grameen Bharat Stocks for 2021 | Best Grameen Bharat Stocks in India

What is this theme all about?

India is predominantly a rural country with 2/3rd population and 70% workforce residing in rural areas. This theme is about riding the story of the upliftment in the standard of living of the rural population leading to increased size of their consumption basket.

What are macro-economic factors driving this trend?

Rural economy constitutes 46% of national income. Despite the rise of urbanisation more than half of India’s population is projected to be rural by 2050. Rural India plays a crucial role in India growth story.

Government has undertaken multiple schemes to increase farm incomes such as PM-Kisan Scheme, Pradhan Mantri Kisan Maandhan yojana, Kisan Credit Card scheme.

The heavy dependence on the agriculture has reduced due to increase in the allied activities. This has reduced the impact of single year of poor monsoon has lesser impact on the rural economy. This is complimented by two consecutive years of good monsoon.

Why is this theme attractive now?

Despite of strained revenues, the government is keen on spending and infusing more for the MNREGA Programme. This is to ensure a consistent employment opportunity in the rural India.

The monsoon has been adequate in India in past few years leading to bumper harvest with output to be consistent or better. This has led to rise in the overall incomes of the farmers.

Central government has planned to double farmers' income by 2022-23 to promote farmers' welfare, reduce agrarian distress and bring parity between income of farmers and those working in non-agricultural professions.

Better road connectivity, increased tractor and vehicle ownership, MSP all these factors have collectively led to increase in the average farmers’ income has increased by 1.7 times in the last 10 years.

What industries/ sectors benefit from this?

FMCG is the 4th largest sector in the Indian economy and is expected to have a long term growth rate of 8-10%. FMCG’s urban segment grew by 8% whereas, its rural segment grew 5% (as of September 2019), supported by moderate inflation, increase in private consumption and rural income.

Indian appliance and consumer electronics (ACE) market reached Rs. 76,400 crore (US$ 10.93 billion) in 2019. The same is expected to double to reach Rs. 1.48 lakh crore (US$ 21.18 billion) by 2025. Tremendous scope for growth lies in the rural market with consumption expected to grow in these underpenetrated areas and rising electrification. Demand for durables like refrigerators and consumer electronic goods are likely to witness an increased demand in the coming years, as the Government plans to invest significantly in rural electrification.

The two-wheeler market in India is forecasted to expand at a CAGR of 7.33%, and reach a sales volume of ~25 million units by 2024, from 21 million in 2019. Although the Indian automobile sector is experiencing a slowdown due to down cycle, Indian government's norms of BS-VI transition and the electrification of two-wheelers by 2025, making the market volatile. However, an increased demand in urban and semi-urban areas, and a relatively low cost of ownership are some of the leading factors that can lead to their growth.

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