Post Budget 2017-18 10 Strategies Companies Must Follow To Tap Rural Markets
Rural & Marketing|March 2017

Companies ranging from FMCG, Consumer durables to Auto, Budget 2017-18 has several reasons for them to smile as rural demand is expected to increase. Companies now gear up to capture the markets and preparations are on. BK Jha Reports.

BK Jha

Rural markets are once again in demand and companies in the segments such as consumer goods, electronic appliances, auto and others are upbeat following Budget 2017-18 announcements. Companies, which witnessed drop in sales between 15-25 percent due to consecutive drought and demonetisation, are gearing up to meet the expected higher demands in rural, and preparations are already on. Focus on rural economy in Budget has provided the much awaited boost.

Budget Bonanza 

The Union Budget 2017 has obviously provided the momentum to the companies which have much higher stake and share in rural markets. In the last three years, performance of several big companies was subdued because of droughts and demonetisation move further impacted their revenue and sales Normal monsoon last year brought in hope, but that was withered away with the sudden mid-might stroke of demonetisation.

However, the Budget's rural sops such as MNREGA allocation being increased from Rs 38,500 crore to 48,000 crore, the coverage of 'Fasal Bima Yojna' has increased from 30 percent to 40 percent. This will definitely be an incentive for the rural consumers to spend.

According to HDFC Security Retail Research on Impact of Budget 2017-18, hike in excise duty across all lengths of cigarettes by 6 percent would have adverse impact on the cigarette companies like ITC, VST & Godfrey Phillips in the near future as the volume growth would be impacted. However, this hike is less than expected. Expectation was that the hike would be around 10 percent. Moreover, Research points out that the Government is committed to double the income for farmers in 5 years. “ Growth in income of farmers could boost demand for the consumer goods products. This would be positive for two wheelers, FMCG and Jewellery,Textile and white goods industry,” it says.

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