Most rural markets – and consumers – have remained insulated from the ongoing global meltdown. The Indian rural market particularly, with its vast size and demand base, offers a huge opportunity that long-term strategists cannot afford to ignore, even in a slowdown.
While forays into rural retail began some years ago, its prospects may have been enhanced by outlays contained in the Union Budget of the current fiscal. Finance Minister (FM) Pranab Mukherjee has given more emphasis on domestic consumption so that rural Indians may one day be turned into valuable consumers. For empowering the weaker sections of society, the FM announced that the Swarna Jayanti Gram Swarozgar Yojna (SGSY) is being restructured as the National Rural Livelihood Mission to make it universal in application, focused in approach and time bound for poverty eradication by 2014-15. “Stress will be laid on the formation of women Self Help Groups (SHGs). Apart from providing capital subsidy at an enhanced rate, it is also proposed to provide interest subsidy to poor households for loans upto Rs one lakh from banks,” he said.
Chief Executive of Agri Businesses, ITC Ltd, S Sivakumar, had high expectations from the budget. And those hopes have been met, with substantial increase in the spends on social and rural sectors. “With more money in the hands of rural Indians, the opportunity for rural retail is brighter than ever. All such products and services that improve productivity and/ or enhance rural incomes will sell well. These could be agri inputs, lighting solutions, education products, mobile phones, transportation, health services etc. With increased incomes, products that improve quality of life – branded FMCG and household appliances – also sell well,” he noted.
There are about 44,000 villages in India in which the population of Scheduled castes is above 50 per cent. A new scheme called Pradhan Mantri Adarsh Gram Yojana (PMAGY) is being launched this year on a pilot basis, for the integrated development of 1,000 such villages. In support of PMAGY, Mukherjee announced, “I propose an allocation of Rs.100 crore for this scheme. Each village would be able to avail gap funding of Rs.10 lakh over and above the allocations under Rural Development and Poverty Alleviation Schemes. On successful implementation of the pilot phase, the Yojana would be extended in coming years.”
“By increasing the disposable income in the hands of the common man and creating more employment in the rural areas, additional consumer spending will further boost the economy. Also, benefits given to rural India like NREGA, rural infrastructure, irrigation, loan waiver to farmers etc will help the rural economy to grow further,” said Rajesh Gupta, president, Hariyali Kisaan Bazaar, while responding to the FM’s statements on rural empowerment.
The Indian rural retail scenario is poised for a quantum leap. And since rural Indians are also rising in aspiration and awareness, there are great prospects for the instant growth of retail marketing in rural India. Many retailers have already expanded their retail operations by setting up stores, and offering newer product categories in semi-urban and rural areas.
— Diwakar Kumar