Impact of rising land prices on rural consumtion; Credit Suisse - Equity Research, Mumbai

Abstract

Credit Suisse Equity Research had hired two interns this time - one from IIM Bangalore and from IIM Calcutta. My internship was for a period of 2 months starting the April 05th. As part of internship, my main deliverable was a report that will be included as a part of their rural theme report for the current year. Apart from the report, I was also involved in the daily activities at the company. I was involved in preparing the "daily" every morning. Daily is a brief summary of all the research findings of the previous day put together in a standard format and sent across to all the clients of the company. I would also be present in the morning meetings every morning which basically was a place where the reaserch team would update the sales team of all the reaserch of the previous trading day. Apart from it, I also got a chance to observe the sales and trading division closely and understand some basic functioning of the same. Focus group discussions were arranged for the interns with the senior people in other divisions too like Private Banking, Asset Management et cetera which helped me gain a holistic view of the finance industry and investment banking in particular. For the purpose of my project report, I was assigned a guide who was also my line manager for the period of two months. My work was divided in four phases. In the first phase which lasted the first week, I gained a very broad and basic understanding of the background subject - land and rural consumption through readings on the internet. I gained a thorough understanding of land holding patterns, land owning laws in India and issues like tenancy, land acquisitions, ceilings on land holdings and land reforms. In the second phase which lasted for another one week, I carried out telephonic interviews with experts on the matter and some government officials. Since much of the data that we needed for the report was not available on the internet, I used this time to set up meetings with government officials, mainly in Rajasthan and Delhi. In the next three weeks, I travelled extensively to Rajasthan, Delhi and Pune and collected data from the government departments and conducted many field surveys. I interviewed people in the NHAI, Delhi, in the Revenue Department, Pune & Delhi, in the Land and Building Department, Delhi and in the Directorate of Economics & Statistics, Delhi. For the purpose of field survey, I covered one district in Rajasthan known as Sikar and covered three villages as a part of the trip. I also interviewed M&M Finance in Mumbai and Maruti and Hero Honda dealers in Sikar to collect data on consumption patterns in rural areas In the remaining three weeks, I analyzed the data and came up with a report of around 60 pages as the final deliverable. My report was divided in three parts. In the first part, I have spoken about all the issues pertaining to land and ownership of land, particularly agricultural lands in India. In the second part I have shown how land prices have moved up so steeply in the past couple of years. In the third part I have tried to show how it has impacted rural consumption. I have presented a few interviews in the report to justify my findings. The report is currently being modified by my guide to make it suitable for finally publishing to the clients and would probably be published to the clients by the end of this month.