As rural economy sparkles, mutual funds push to capitalise

With the rural economy performing well on the back of good rainfall and agricultural sector growth, mutual fund houses have started launching rural-focused funds to take advantage of the improved outlook for companies benefitting from a rise in demand from rural and semi-urban centers. ICICI Prudential Mutual Fund (January) and Kotak Mahindra Mutual Fund (November) have both launched a specialised Rural Opportunities Fund this year.

“Earlier, agriculture was the primary contributor in rural income, now non-agriculture makes up has 50 per cent contribution. Our view is rural economy will continue to do better than urban economy over the next couple of years,” said Nilesh Shah, MD at Kotak Mahindra Asset Management Company.

“Rural India has a higher population and also has higher increme