The experts say that the FY10-11 budget is one of the best budgets the government has presented in the recent years which not only introduced reforms that would instigate growth, but also focused on the mounting deficit and laid a clear road map that ensured that the country is not on the path of becoming the next Greece.
I agree to all what the experts say that the budget did so many things that is good for the economy in the longer term it includes things like:
- Reducing the tax slabs that would empower the consumer
- Moving towards simplified tax reforms
- Only partial roll-back of stimulus
- Thrust on Power generation and infrastructure, etc.
I could go on and keep talking about these things, but one of the most important take aways which I believe is not receiving media attentionis that the government is is working towards bridging the gap between BHARAT & INDIA.
This is the place I believe where the growth lies, the steps like
- Allocation Rs 66, 100 cr for rural development in FY10-11
- Increased spending on rural infrastructure
- Increasing agricultural productivity
- Increased spending on primary education at rural level
- Increase spending on rural employment and other social schemes
- Higher focus on power development in rural sector, etc
will definitely instigate the growth and bridge the long time gap and empower the masses that would lead to the higher inclusive growth.
Hence, as an analyst I believe that one theme that could be worked upon in the near term and which could have the potential of creating wealth in the long term is to invest in companies that is working in rural India or rural development.
Some examples could include pharma companies that focus mainly on rural medicines, rural infrastructure companies, food processing companies, etc.
I will start working on this theme and would let you all know what stocks could be invested on and would be great if you all could also share your views on whether this theme makes any sense or not and if yes than stocks you believe could be worked on.
Author: Rahul Sonthalia, Analyst, Kredent Group