Mumbai, June 4 (IANS). If the monsoon is better than normal, in the second half of the current financial year, the income of agriculture such as tractors, agri-input, rural NBFCs and consumer durables may increase in an annual basis of 10-15 percent. It will also support the recovery in rural demand and increase in liquidity.
Smallcase manager Golfi report said that crop yield will be good due to good monsoon and this will help in keeping the prices of food products low. For this reason, in the decision of RBI MPC on June 6, the repo rate can be reduced by 25 basis points to 5.75 percent.
The report further stated that if the inflation rate is less than 4 percent, the RBI can reduce the repo rate to 5.5 percent in August MPC. This can provide boosts to sensitive sectors such as housing, automobiles and NBFCs towards interest rates.
Robin Arya, a smallcase manager and founder of Golfi, said, “India has a unique confluence in 2025, on one side the monsoon will come ahead of time and there will be more rainfall than average and on the other hand decisive election results will prepare a platform for policy continuity.”
He said that the rotation of the sectors is going on and with the expectation of assistant monetary policy, the rural-centric and sensitive areas of interest rates are ready to perform better in the quarters coming.
The effect of good monsoon has already started appearing in food inflation. In April 2025, the retail inflation rate came up to 3.16 percent, while food inflation is only 1.78 percent, which is the lowest level in many years.
The report said that due to increasing consumption, inflation decreasing and interest rate cuts in the country, Nifty can give 6-8 percent returns in the next two quarters.
The general monsoon historically increased rural income by 5-7 percent, it has a widespread impact in the consumption areas.
-IANS
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