Invest through mutual funds to exploit rural India opportunities – CNBC TV18

India is rapidly emerging as one of the fastest growing economies in the world, shedding its “delicate five” tag. However, the development journey of the country is incomplete without the development of its rural areas, where most of the population lives. Rural India is an important contributor to the country’s GDP, especially through labor in major areas such as manufacturing and construction. In the last few decades, government initiatives have greatly improved access to socio-economic services and promoted structural changes, which is a major driver of India’s economic future.

Role of rural development in economic development

India is set to be one of the top three global economies by 2047, which is the expected GDP $ 35 trillion, which is above $ 3.2 trillion today. An important part of this change lies in rural development. Rural India, which has a population of about 64%, is now 46% of India’s GDP and half of its overall consumption. It makes rural areas an important development engine for the country’s economy.

Agriculture remains the foundation stone of rural economy, which contributes 16% to GDP and employs 41.5% of India’s workforce. Despite challenges like Covid-19 epidemic, agriculture has increased by 3.4% per annum. However, India’s attention is gradually moving towards manufacturing and services to further enhance the rural economy. The government’s initiative with high allocation for rural development in the last decade is increasing the infrastructure and quality of life in these areas. The following factors have further contributed to creating opportunities in rural India.

Government initiative to run rural development

Programs like Prime Minister Avas Yojana Gramin have constructed 2.1 crore houses, while the Saubhagya Yojana has electrified 2.9 crore rural families. The purpose of the water life mission is to provide 11 crore tap water connections and 7.2 lakh km of roads have been constructed, which increases connectivity. The National Education Policy, along with the establishment of 14,500 PM-Shri schools, is also scheduled to bring revolution in education in rural India.

Digital revolution in rural India

Digitization is another major promoter of rural development. The number of wireless customers in rural India has increased by 1.4 times in the last decade, enabling connectivity to improve and digital access. It has promoted market information, increase in online payment and sale of local products. Digital progress is connecting rural areas, promoting social cooperation and opening new economic opportunities.

Structural change and changing consumption trends

There is a significant change in the rural workforce, which is moving away from agriculture towards non-agricultural sectors like construction, construction and trade. Rural per capita income has now exceeded $ 2000, which has increased discretionary expenditure. The share of food expenditure has fallen from 60% to 46%, which reflects increasing expenses on non-essential goods. Additionally, the increasing participation of women in the workforce is further increasing domestic income and supporting consumed development.

Conclusion: a promising investment opportunity

The economy of rural India is indicating recovery, in which the major indicators have been changing positive since August last year. The government’s focus on manufacturing, infrastructure reforms and socio-economic initiatives shows a promising future for rural development. Investors can tap in this long -term structural development story through mutual fund schemes that are focused on rural India. As rural areas grow, investment in rural-focused mutual funds provides a compelling opportunity to capitalize on the change of rural economy of India.

Comment: This article in a participation post written by Mutual Fund distributor King Rajanikam.