Budget 2017: Improved connectivity, salaries could increase two-wheeler sales in rural areas

It has only been a couple of hours since the Finance Minister concluded the Budget 2017. While there were a host of budgetary changes in the infrastructure area, there were a few policy changes that could mean good news for the Indian two-wheeler industry.

The Finance Minster has increased the budget from Rs 38,500 crore to Rs 48,000 crore for MNREGA (The Mahatma Gandhi National Rural Employment Guarantee Act 2005). The act is applicable to adults residing in rural India which gives them 100 days of confirmed wages and employment. This will mean more employment and increased spending power in villages across India. And given personal mobility ranks high for most chances are spending will be directed to towards two-wheeler sales.

The Finance Minster has also announced increase in pace of road construction under the Pradhan Mantri Gram Sadak Yojana (PMGSY), which has been amplified to 133 kilometres per day against 73 kilometres per day in the 2011-14 time period. With improved road connectivity and increased spending power, the two-wheeler sales are bound to grow. Companies like Hero MotoCorp, Honda Motorcycles and Scooter India and Bajaj Auto will gain the most from this as these companies have strong rural market penetration.

We’re expecting manufacturer to launch new and facelifted fuel-efficient bikes and scooters to cash in on this.