Rural demand is expected to pick up in the coming months driven by MSP hike, farm loan waivers and rise in rural spend in the run up to 2019 general elections, says a report.
According to a Bank of America Merrill Lynch (BofAML) research report, rural demand is on an uptrend and investors should invest in consumption driven stocks while making their equity investments.
"We expect rural demand to pick up through end-2019 on the back of pricing power on a not-so-good harvest, MSP hikes and farm loan waivers," BofAML said.
Owing to patchy monsoon, the growth in production is expected to be lower than that of cropping. However, hike in minimum support prices (MSPs) is expected to drive up farm prices.
Income from horticulture is also expected to go up this fiscal. As per the report, April-August fruits and vegetable price inflation is up 5.6 per cent, in contrast to the drop of 2.1 per cent last year.?
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