The landscape of Rural India is fast changing. It's no longer only an agriculture-driven economy; sectors like manufacturing, construction and trade activities are playing crucial roles in its development. Nearly 99% of the villages are well connected with roads, bridges and electricity; mobile penetration is at its peak, education and medical facilities are improving, literacy rate is at all time high, average per capita income has crossed $2000 - creating disposable income resulting in a rise in rural consumption.
Given the fact that nearly two thirds of the Indian population resides in rural regions while contribution to GDP stands at about 46%; the rural theme is presenting perfect futuristic opportunities for investment. The continuous government measures to develop rural regions has started showing its positive impact. A long-term structural story is unfolding in rural India. Recent commentaries from major corporations clearly suggest that demand from rural economies is rising. In fact, rural areas can't be ignored anymore for a holistic investment portfolio.
Post Covid, urban economy showed sharp recovery. However, the rural region is witnessing slow recovery. Green shoots are already visible now for high growth going forward in the rural belt. Share of food in the rural expenditure has come down to 46%, reflecting a rise in discretionary spending. One may note that per capita income in the urban centres crossed the $2000 mark a decade back which fuelled consumption. Similar story is likely to unfold for rural economies as their income as well as sources of income rise.
Investors should consider riding on the wave of the structural growth story of India's rural development. They may consider mutual fund schemes which focus on the opportunities emanating from rural India. In the long-term, such investments are likely to add significant value as Rural India is all set to accelerate India's overall growth story.
Aligned with this, investors may consider ICICI Prudential Mutual Fund’s latest offering – the ICICI Prudential Rural Opportunities Fund. This open-ended equity scheme, centered around the Rural and allied theme, will be available for subscription from January 9, 2025, to January 23, 2025. The fund primarily focuses on sectors and companies driving and benefiting from the growth and development of rural India.