From Housing to Airlines: 7 Major Sectors to Receive Favors from Budget 2016

Fast Moving Consumer Goods (FMCG)

Most FMCG companies have witnessed low-volume growth over the past year owing to muted demand from rural India. However, assuming a normal monsoon this year, rural consumption should pick up, which will boost firms such as Marico, Dabur India, Hindustan Unilever and ITC, as they have a higher contribution from rural areas in their revenue mix. The Union Budget 2016 includes highest allocation towards MGNREGA and a strategy to double the income of farmers by the end of 2020. This, coupled with the allocation towards the Seventh Pay Commission should provide a strong boost to rural consumption.

Automobiles

The highest allocation to MGNREGA and pro-farmer focus is good news for the automobile manufacturers, especially for two-wheeler and commercial vehicle manufacturer. Additionally, if the monsoon plays better this season, it will surely boost rural income which could enhance discretionary spending on items like tractors and other agricultural machinery.

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