Budget 2016: Infra, rural push may boost core sector
Also, higher allocations for rural schemes should push demand for consumer goods
An increased outlay for infrastructure at Rs 221,246 crore, social economic programmes and rural push could have a beneficial effect on companies in the cement, steel, consumer goods and automobile sectors, where volume growth has dropped to single-digit over several quarters.
Consumer goods companies get 30-50 per cent of sales from rural India, where demand has been hit by consecutive years of deficit rain. Core sector companies have seen volumes drop to single digit in the first nine months of FY16. "The Union Budget is rightly focused on rural and infrastructure sectors. The planned investment in these will create jobs and give impetus to demand generation and growth," said Krish Iyer, president and chief executive officer (CEO) of Walmart India.