After many years the rural economy has returned to its glory! How can townspeople benefit?
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Investment Tips: After many years, the rural economy is back on track and city dwellers can also benefit from it. There are many mutual funds in the market, which focus on rural development and…Read more

The rural economy contributes more than half of India’s GDP.
New Delhi. It is said that India lives in villages. No matter how modern and developed cities become, India’s economy still revolves around villages. There are two main reasons for this, one is that a large proportion of the working age population is in rural India and the other is that 64% of India’s population lives in rural areas. This is the reason why rural economy accounts for almost half of India’s GDP. After the Modi government took over, many initiatives were taken to improve the quality of life in rural areas and this benefited in the form of improvement in the rural economy, which has reached a turning point after decades. But the question is how the city people can benefit from this boom in the rural economy.
Priyanka Khandelwal, fund manager at ICICI Prudential AMC says that there were more employment opportunities in cities than in rural areas. Therefore, till now the rural economy was suffering from slowness, but with the government policies, great opportunities have started to arise in this sector as well. To take advantage of this, ICICI Prudential Rural Opportunities Fund has been launched. The fund offers investments in rural development and consumption themes by balancing heterogeneous and structural investment opportunities. It tracks the Nifty India Rural Index, a diversified benchmark that includes shares of 11 sectors and 75 companies. It has a large share of large companies.
Why is this fund better?
The fund focuses on certain structural themes and underperforming sectors, which have the potential to perform well with accelerated rural development. With its multi-sectoral and flexible approach, the fund aims to navigate the evolving rural landscape and deliver sustainable long-term returns. This gives the investors an opportunity to get higher returns along with rural development.
There is great potential.
The rural economy has great potential for growth. Rural consumption and savings will be promoted through schemes like Ladli Bahana. Agricultural indicators are also looking good which bodes well for farm income in the near term. The government is also increasing the prices of crops, which is increasing the income of farmers. As the incomes of rural Indians improve, rural consumption is also likely to increase. But, with the increase in income, savings in rural areas should also increase and given the possibility of increase in deposits, the banking sector will also consider expanding its branch network. It is also likely to increase insurance penetration in rural areas.
Roads will also be widened.
Connectivity is another issue that benefits rural development. Sectors like telecom and auto can benefit from investments made in the last decade to improve road infrastructure and power availability. Affordable telecom tariffs and the availability of cheap smartphones have ensured that rural Indians are connected to the world, resulting in increased awareness and aspirations in rural India. Public transport infrastructure in rural areas is not so developed, with an increase in disposable income, the sales of two-wheelers and passenger vehicles in rural India may improve.
Increase in income will benefit.
When household income increases, people aspire to live better, look better, and feel better. Many consumption-related sectors benefit from this, as we have seen in urban India over the past decade. Rural per capita income is also close to the point where non-food consumption should increase and companies that focus on serving these consumers can benefit from better growth prospects. This will directly benefit the investors.
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New Delhi,Delhi
January 17, 2025, 11:19 IST
After many years the rural economy has returned to its glory! How can townspeople benefit?
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