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Rural Consumption Outgrows Urban Consumption

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Normal monsoon can push rural consumption

Data released by global research firm Nielsen shows that rural consumption grew by 13.5% on a year-on-year basis between January – March 2018 as compared to 10% growth recorded in urban India. With GDP growth averaging 7.4% over the last 4 years and demonetisation impact wearing off, rural demand has held up.

If the monsoon turns out to be normal, as has been predicted so far (it will be the third consecutive year of normal monsoon), rural consumption will get further fillip in the second half of the financial year. With elections around the corner, analysts expect generous increase in minimum support prices for Kharif crops and this is also expected to drive rural demand.

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Companies expected to generate higher earnings

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Broadband to every citizen

Communications Minister, Manoj Sinha last week said that National Digital Communications Policy 2018 will be approved by the end of July 2018. Through the policy the government aims to provide broadband access at 50 megabits per second (mbps) speed to every citizen, attract $100 billion investment in the sector, and create 40 lakh jobs by 2022. He also said that the telecom sector received $6.1 billion in foreign direct investment (FDI) in 2017-18, up from $1.3 billion in 2015-16.

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Markets update

Markets were marginally up last week. Nifty ended up 0.46% at 10,817.7 and Sensex closed up 0.5% at 35,622.1.

Namrata Chandrasekar

CX Manager at smallcase

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