Indian Rural Mkt

7/18/2019 Indian Rural Mkt

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Indian Rural Market: A Brief Profile


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Learning objectivesLearning objectives

To understand demographic profile of rural India

Be aware of different poert! alleiation and

deelopmental programmes of goernment in the rural

areas

Anal!"e the rural consumption and spending patterns


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Learning objectivesLearning objectives

$raw an interrelationship %etween agriculture& rural

income and consumption patterns

'nderstand the electricit! infrastructure aaila%ilit!

across rural India

(omprehend the nature and characteristic of rural

market


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Rural India: A Brief ProfileRural India: A Brief Profile

*+, of Indias and 12.2, of worlds population lies in /&

#0/+ illages of India spread oer #2 lakh suare km.

3, of rural population is concentrated in the illages

with population less than 2333.

(omprises of 1#.+ crore households& constituting *2,of total households in India with )0 crore adult

indiiduals.


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Rural India: A Brief ProfileRural India: A Brief Profile

Rural is not homogeneous across the countr!.

4ariations in e5posure to ur%an centers and e5tent of

deelopment in a region hae resulted in tremendous

heterogeneit!.

The consumers willingness to accept innoation ariessignificantl! from one rural market segment to another.


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Rural Income DistributionRural Income Distribution

Rural India is generating more than half ofnational income.

)1, of Indian middle class homes and +0, of

disposa%le income e5ist in rural India.

Income contri%ution of ++./, to the national

income %! rural population of *)./ crore is

higher than ur%an Indias with 2+.) crore people

contri%uting ))./,.


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Rural Income DistributionRural Income Distribution

Per capita income turns out to %e significantl! lower inrural areas %ecause of the large population %ase. 6tud! %!

7(A8R reealed that annual household income for rural

areas in 2332 was Rs.+/&/#3 as compared to Rs.1& 32&/# in

ur%an areas.

Rural accounts for 2 lakh middle-income households&

haing annual income in range of Rs.#3&331 to Rs.1&2+&333

and ur%an like consumption.

If there are 1.3 crore high and upper-middle income

households in ur%an India then there are */ lakh in rural

India.


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Income in Rural and Urban Areas: AIncome in Rural and Urban Areas: A

Comparative AnalysisComparative Analysis

As per7(A8R& in 2332 per capita annual income in rural

areas was Rs.& )01 whereas in ur%an areas it was Rs.1&

)3* and the national aerage was Rs.12& 120.

Rural incomes (ompounded Annual 9rowth Rate (A9R;

%etween 1*3-*1 and 1#-) was 13.+, compared to

13.*), in ur%an areas. 8TI9 2332-3#;


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Comparative AnalysisComparative Analysis Rural and ur%an incomes were more eenl! distri%uted in

1)-+ compared to 1*+-*/& %ut all India ineualit! has

marginall! increased. The share of rural income in 1*+-*/

was //.0,. According to the MIMAP sure! of 1*+-*/& the

ur%an household earned an income on an aerage 1.02 times

the rural households& while the MIMAP sure! in 1/

indicated the gap has widened and increased to 2.1 times.Pradhan& 2333;


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The 9ini Inde5& which is a standard measure of

income distri%ution among indiiduals or

households in a countr!& shows that ineualit! had

risen from #3 in 11 to #0 in 1*& owing to the wide

disparit! in economic growth and distri%ution

%etween rural and ur%an India.


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Income Distribution in Rural AreasIncome Distribution in Rural Areas

Rural is not as poor as it is widel! perceied to %e. If thereare large num%er of poor people in illages than good

num%er of rich are also present.

Between 102 and 1 per capita illage incomesincreased %! *3,& population increased %! )*, and the

share of non-farm income in total illage income rose to

almost +3,.

In 1*1& 02, of men in the 2+ to )) age group in ruralareas reported their primar! actiit! was either farming or

agricultural la%our& this figure dropped to *#, in 102 and

to +#, in 1.


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Income Distribution in Rural AreasIncome Distribution in Rural Areas

Between 1*1 and 102 the proportion of prime working age men

earning income outside the agricultural sector rose from 13, to

1/,& %! 1 this figure had more than dou%led to #/,. As this

ratio increases& the c!clical and unpredicta%le nature of Indian

agriculture ma! hae lesser impact on rural incomes and

consumption than %efore.

(omparison of findings of MIMAP sure! in 1)-+ with similar

sure! conducted %! 7(A8R in 1*+-*/ reealed a significant

decrease in share of income from farm sector from #*.0, to 23.+,&

increase in share of income from salaries from 22.*, to ##./, and

other incomes from *.2, to 12.), during the two decades 1*+-*/

to 1)-+;.


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agnitude of Poverty in Rural Indiaagnitude of Poverty in Rural India

#2.+ crore people lied %elow poert! line BP=; in

India& which is around one third of the population.

Incidence of poert! in rural areas at #.), is much

higher than 20.), in ur%an areas.

A%out 03, of poor lied in rural areas in 1+& %ut that

does not mean rural is onl! poor. More than /3, of rural

population is a%oe poert! line and in actual terms itcomes out to %e large num%er.


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agnitude of Poverty in Rural Indiaagnitude of Poverty in Rural India

Percentage of BP= families declined from )/, to 2*,.But& actual num%ers remain almost same.

>igure of population BP= aries significantl! from one

state to another.


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Poverty Alleviation Programmes andPoverty Alleviation Programmes and

Rural DevelopmentRural Development

=and reforms 9ram 6adak @o?na

Proiding 'r%an Amenities in Rural Areas P'RA;

7ational Rural 8mplo!ment 9uarantee Act Integrated Rural $eelopment Programme IR$P;

awahar Ro"gar @o?na: largest rural poert! alleiation

programme through pu%lic works. It was launched in10 %! merging 7ational Rural 8mplo!ment

Programme 7R8P; and Rural =andless 9uarantee

Programme R=89P;.


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Rural ConsumptionRural Consumption

As per >rancis anoi Marketing Planning 6erices& rural

market for >M(9 was Rs./+&333 crore& for dura%les

Rs.+&333 crores& for tractors and Agri-inputs Rs.)+&333

crore and for two and four wheelers Rs.0333 crore a totalof Rs.1&2#&333 crores.

7ot competing in rural market remoes a compan! froma%out half of necessit! products market 1C# of emerging

products and a 1+, of lifest!le products in alue terms.


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Per capita e5penditure on education of the ur%an

households was ).+ times that of rural& twice on health&

fie times more on rent. Rural households hardl! change

their house or go for acation. The! sae onl! fraction of

mone! and spend the rest. And when there is growth in

income& the mone! goes straight into consumption.

Thus& the actual disposa%le income in a rural household

comes nearl! to %e the same of ur%an ones.


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There was three-fold increase in consumption of packaged goodsin rural areas 10)-0; and percentage of rural market in all Indian

market increased from 20 to #*,.

Rural >M(9 market was worth Rs.))&333 crore in 10 amounting

to oer half of total Indian market and grew at an annual aerage

rate of oer 12, %etween 1#-0.

The share of e5penditure on food item is going down in rural areas.

In 1#-)& food accounted for /+, of aerage rural per capitanatural e5penditure. B! 1-2333& it had come down to /2,. It is

not %ecause of an! fall in the real e5penditure on food. In fact there

has %een a sharp rise in the per capita real spending on non-food

items.


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Rural household spends Rs.#& 23# per !ear for >M(9sthat is Rs.2/*& per month and this figure e5cludes cereals&

pulses& egeta%les and milk. This amount could ar!

%etween Rs.#/+ and Rs.1*+ depending in the socio-

economic status of the household IR6 1;. This seems

to %e a small num%er %ut in the conte5t of huge marketsi"e of rural India it leads to huge num%ers.

Rural telephone densit! has gone up %! #33, in the last

13 !earsD eer! 1333 plus population is connected %! 6T$.$uring 101 - 2331 num%er of pucca houses dou%led from

22, to )1, and kuccha houses haled )1, to 2#,;.


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Literacy in Rural IndiaLiteracy in Rural India

Rural literac! has improed from #/, to +,& %ut a long

wa! to go.

There is increasing trend of pu%lic school education

een in rural areas& especiall! in progressie and

deeloped states like Pun?a%.

There are more literate people in rural India 1/.+ crore;

then in ur%an India 1/ crore; %ut& head of household

reported no formal education in +1, of ruralhouseholds and same was onl! in 1/, of ur%an

households& while the all India leel is )1,. The share

of income of these )1, of households was onl! 2*.,.


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Literacy in Rural IndiaLiteracy in Rural India

More than ++, of head of households reported at least

secondar! education in ur%an areas whereas figure was

1+, in rural areas.

In a%out 2/, households& head was a graduate or a

technical degreeCdiploma holder in ur%an areas& had

#0.+, of income& while 2.#, of such households hae), of income in rural areas.


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!lectricity Availability in Rural India!lectricity Availability in Rural India

+/, of the households in the countr! had an electricit!connection in 233+. The ma?orit! of households not

haing electricit! are in the rural India.


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!lectricity Availability in Rural India!lectricity Availability in Rural India

There is a great deal of ariation amongst states.

A%out 3, of houses in Pun?a% and 9oa are

electrified& in harkhand it is 2+,& whereas in Bihar& at

the %ottom it is 13.#,. In states like Ear!ana& ammu

F ashmir& 9u?arat& arnataka& Tamil 7adu&

Maharashtra& erala and Madh!a Pradesh more than*3, households are electrified.


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Development Indicators in Rural IndiaDevelopment Indicators in Rural India

India was ranked 1#0th as per Euman $eelopmentReport E$R; 1*.

Indias infant mortalit! rate of *+ per thousand lie%irths is one of the highest in the world.

Access to pota%le water& health care& sanitation andshelter are a far cr!& particularl! in the rural sector.


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Development Indicators in Rural IndiaDevelopment Indicators in Rural India

erala has highest E$I& 03, higher than national

aerage& although its per capita income is less then

1*states.

India is at 13#rd rank in 12# countries in 9ender

$isparit! Inde5 9$I; with a alue of 3.)1. But& eralas

9$I alue of 3.+* is at par with Mauritius& which is

03th in the world and 'Ps 9$I alue of 3.#1 match the

tail end countries.


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C"aracteristics of Rural ar#etC"aracteristics of Rural ar#et

=arge and 6cattered market

Eeterogeneous market

6ignificant ,age of Income from agriculture

=ack of Infrastructure >acilities


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$ummary: Points to Ponder$ummary: Points to Ponder

Rural is a highl! heterogeneous and widel!scattered.

Rural is not as poor as it is perceied to %e& it

contri%utes to more than half of the national income.

Rural market consumes a%out half of necessit!

products& 1C# of emerging products 1+, of lifest!le

products in alue terms.

Indian Rural Mkt

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