Policy

Rural investment shows a decline ratio of 5 percent in 2015

Rural demand is dented because of the falling wage growth due to three consecutive monsoon shocks.
Rural investment shows a decline ratio of 5 percent in 2015

Rural India is making a make-shift. Their has been tremendous change in both agriculture and non-agriculture sectors which require both monetary as well as proper ideas to make the best rural product to sell in the markets and offer development and prosper to the rural belts.

The urge of development refers to the gaps in the infrastructure, education , health and above all agriculture sections. Investments has become a compulsory factor for rural development. Statistics about domestic investment and capital formation are not encouraging and show a decline in the second quarter of 2015. India’s saving rate is also down from a peak rate of 38 per cent to 31 per cent.

Everyone watching the economy is worried about the slow rate of investment which is not forthcoming from the Indian corporate sector. Net profits in the second quarter of 2015-16 have remained flat at 0.05 per cent for the corporate sector. Except for pharmaceuticals, fast-moving consumer goods and automobiles, companies are struggling to pay off debts. According to Standard & Poor,  100 corporates had a debt of $300 billion in 2014. High interest payments towards paying back of corporate debt are cutting into their profits.

The corporate sector depends a lot on rural demand and there has been bad news on the agricultural front.  Agricultural stress is still present and agricultural growth slid to 1.5 in April- June quarter. Rural demand is also dented because of the falling wage growth due to three consecutive monsoon shocks. Slack demand is also due to low earnings from agricultural exports because of low commodity prices. Global commodity prices have fallen by nearly 17 per cent compared to last year. 

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The Changing Face of Rural India