Massive non-farm income to push rural India in H2: Axis Cap

Even as urban population continues to struggle with inflation and overall economic slowdown, the rural consumer seems to be  growing stronger everyday. The prospect of a bumper summer crop after good rains this year has raised hopes that rural consumption will  offset the sluggishness in urban consumption .

Axis Capital carried out an extensive survey wherein seven teams traveled across 36 tier II-III towns and nearby villages in seven states. While the demand has remained weak across FMCG, auto, white goods and cement sector for urban areas, rural consumption was strong due to structural non-farm income growth.
According to Nandan Chakraborty, MD (institutional equity research) of Axis Capital, farmers are shifting to dairy and poultry farming, which is 20 times more profitable than paddy. "We saw that wherever there was more connectivity, they (region) have become more prosperous," he told CNBC-TV18.
Also, a lot of farmers opted to sell their lands in the more expensive rural areas to take larger lands in the slightly outlying, but still well connected areas. This resulted in a massive wealth effect, the Survey said.