9 Beneficiaries

Here are nine sectors that’ll benefit if India grows at 9 percent. However, that will be sustainable only if agriculture and allied sectors become active participants in, and major beneficiaries of, the growth story.

- Pramod Mathew

AS FAR AS INDIA’S ECONOMY GOES, the proverbial rising tide lifts all sectors. However, not all sectors rise equally. Between 2005 and 2008, when growth in the country's Gross Domestic Product (GDP) averaged above 9 percent, the industry and services sectors grew in high-single or double-digits. In the agricultural sector, however, there was a relative dry spell.

India’s failure to cling on to the high headline growth witnessed in the mid-noughties is proof of the unsustainability of noninclusive growth. (“Growth for the sake of growth is the ideology of the cancer cell,” wrote American essayist Edward Abbey.)

“[GDP] growth should be sustainable, any nation can increase its headline growth temporarily,” says Nikhil Gupta, macroeconomist at Motilal Oswal Financial Services.

Samantak Das, chief economist & National Director at real estate consultancy Knight Frank, says high single-digit growth that is sustainable will come when the “bottom of the pyramid” (read rural sector) becomes an equal partner in the nation’s growth prospects. He believes the revival of agriculture growth will be instrumental in achieving sustainably high GDP numbers. Das sees companies that have a stake in the growth of the rural economy becoming major beneficiaries if India clocks 9 percent GDP consistently.

Sahil Kapoor, chief market strategist at Edelwiess Investment Research, too, is bullish on ruralfocussed sectors. "[Expected] normal monsoon, hike in MSP and higher budgetary allocation for rural expenditure indicate revival in rural economy. India is a consumption-based economy. In the consumer space, rural-focussed sectors are expected to do well.”