Over the past decade, the rural economy has registered an impressive growth, driven by eight good monsoons, a hundred per cent increase in the minimum support price for primary crops and a variety of other factors. This is revealed in a report published in the latest edition of the ‘Rural Marketing Book’ said.
The book, authored by MART founder Pradeep Kashyap, was released during MART’s 30th anniversary here recently. MART is a social enterprise which transformed into a management consulting organisation in emerging markets to work for the rural population.
There is a rise in the non-farm sector driven by improvement in infrastructure and growing exports of handicrafts, gems and jewellery, and carpets, the study by the MART found.
In fact, the non-farm output now constitutes 60 per cent of rural income, and the economy is far less dependent on agriculture, which now contributes only about 30 per cent of the total rural income, it said.
In fact, there are now 20 million non-agricultural enterprises operating in rural areas compared to only 16 million in urban India, the report said.
In addition, most households have multiple sources of income, both from farm and non-farm sources and one member from most families earns a regular salary in a government or private job nearby, it said.
“This has boosted the market as it no longer has to wait till the harvest to sell high-ticket durables to villagers. With a regular income, rural people are in a position to buy at any time of the year. Due to this reason, rural consumption has jumped massively in the last decade,” the study said.
More than 90 per cent villages are now connected by an all-weather road, which is good news for marketers, it said.
Almost all villagers – have electricity connections, favourable for the durables industry, although uninterrupted electric supply is still a problem, the report said.
The penetration of mobile phones has been spectacular, which suggests that all-consuming households are exploring the world through digital connections, it said.
Literacy levels have been rising rapidly and today there are more graduates in rural India than in urban India, the book said.
The educated youth are employed in nearby towns in banks, government offices, schools, and in the private sector. They earn urban salaries, but because they continue to live in self-owned homes in the village, they have the highest purchasing power.
This educated salaried population-fully aware of and exposed to urban influences-is a powerful force and an early adopter of new products and services. With rapidly rising incomes and a growing middle class, the demand for most categories is expected to explode.
Although the rural and urban market shares were nearly equal for both FMCGs and durables earlier, rural sales grew at twice the level of urban sales for FMCGs and thrice for durables in recent times! Another emerging trend in rural India is the use of multiple brands in the same household, again reflecting the growing rural prosperity, the report added.