The market is pricing in a reform-oriented stable government, pivoting around one national party.
The Union Budget for FY2019 had indicated a fiscal deficit target of 3.1% of the GDP for FY2020. However, considering the possible spill overs of subsidy from FY2019 to FY2020 and the upfronting of dividends through interim pay-outs in FY2019, we expect the fiscal deficit to be higher, at around 3.3% of the GDP.
China's rural economy - comprising small farm holdings and low-end industries - is in particular need of policy support, with local populations rapidly greying, productivity slumping and few growth engines in sight.
Bihar has the most number of target villages, followed by West Bengal, Jharkhand, UP and Madhya Pradesh
The year 2017 was particularly bad for the farming community. Parts of the country were affected by poor monsoon while other parts saw the downside of good rains which saw a bumper crop resulting in prices falling below the cost in many regions.
Reserve Bank of India Governor Urjit Patel, known for calling RBI an â€œowlâ€, may have turned hawkish on its monetary policy stance towards the year end.
Last year, the ministry had allotted Rs 87,765 crore for the development of the distressed rural sector, of which Rs 38,500 crore was set aside for the Mahatma Gandhi National Rural Employment Guarantee Scheme.
Budget should boost rural economy and farmer financing which were hit by demonetisation, G Vijay Kumar, CFO of Kaveri Seed Company told CNBC-TV18.
Tamil Nadu Chief Minister, O Panneerselvam wrote a letter to Prime Minister Narendra Modi requesting Rs 39,500 crore from NDRF to help the state tackle the drought. CNBC-TV18's Jude Sannith, who is in Tamil Nadu's agricultural belt in Tirunelveli district, reports that an already fragile rural economy is showing cracks.
"Rural economy is collapsed. Farmers and cooperative movement are affected due to denomination. The move has failed to curb black money. Rs 14.38 lakh crore out of Rs 15.42 lakh crore are deposited in banks till date. If this is the outcome of this major decision then what was the real reason behind it?" he said.
The impact of demonetisation seems to have disrupted rural economy. CNBC-TV18‘s Deepthi Bathini has the ground report from villages of Nizamabad in Telangana.
The rural economy has been feeling the heat since the government's demonitisation decision. This is especially being felt in the agrarian sector. CNBC-TV18 reports from Madoor and Ramnagar in Karnataka to see how farmers are reacting to the government's move.
Secretary to Government of Nagaland, Y Kikheto Sema said the state Department of Land Resources in sync with other line departments would be taking up massive coffee plantation drive in every district as the state has been declared geographically and topographically suitable for coffee by the Coffee Board.
Icra said emphasis on boosting rural economy in the Union Budget 2016-17 is also likely to spur rural demand which could augur well for the industry over the next three years.
Plantation drive on 1 lakh km of highways under the National Green Highways Mission will create jobs for 10 lakh youth and prove to be a game-changer for the rural economy, Union Minister Nitin Gadkari said on July 1
UBS' Gautam Chhaochharia says the positive impact of monsoon is overestimated ("it directly impacts 3 percent of the GDP") but added that, on the flip side, a third straight year of weak rains would be a cause of worry, if forecasts do not play out.
The Narendra Modi government has been accused by some of taking its eye off the accelerator when it comes to the rural economy.
The company has had tailwinds in its premium product segment growth in the quarter gone by, says Varun Berry, MD of Britannia Industries.
In an interview to CNBC-TV18 after reporting its fourth quarter earnings, Firodia said the traveller products division did very well with vehicles business contributing about 70 percent to growth and balance 30 percent coming from the engines business.
Aside from the environmental and aesthetic aspects, they have a huge potential to generate jobs and can immensely benefit the rural economy. It may even be linked with the NREGA scheme, Road Transport and Highways Minister Gadkari said at an event.
Other factors that are likely to drive growth would be government spending on infrastructure and visible uptick in brownfield investments, says Uday Kotak, ED & MD of Kotak Mahindra Bank.
Skymet report further adds that there are about 20 percent chances of excess rainfall and a 35 percent chance of above normal rainfall this year.
Those with undisclosed income and assets are being provided a four-month window beginning June 1 to declare their wealth, pay normal tax rate of 30 percent plus 15 percent in penalty and surcharge and escape prosecution.
Refusing to call the compliance window an amnesty scheme, Finance Minister Arun Jaitley in his Budget for 2016-17 announced a four month window beginning June 1 for holders of unaccounted wealth to come clean by paying 30 percent tax plus a penalty of 7.5 percent and a similar percentage of surcharge.
Dharmesh Mehta of Axis Caital says while the capitalization of public sector banks is smaller than expected, there are positives like no move on the long-term capital gains tax.