OVERVIEW OF RURAL INDIA

Ø INDIA - A NATION IN TRANSIT :-

• “Change is the only constant” in all our lives . But the change being witnessed in the Indian economy is particularly interesting

• There is a bi-faceted change from National to Global & from Urban to Rural . National to global is a worldwide phenomena . In India it gained in momentum with the opening up & liberalization of the economy in the 1990s

• Arrival of many well known MNCs and international brands uptill now were available only in the grey market but now its changing as the MNCs are moving towards rural areas.

Ø “RURAL” DEFINED :-

According to the census of India, village with clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than 400sq.km and with at least 75 per cent of the male working population engaged in agriculture and allied activities would quality as rural. According to this definition, there are 6,36,365 villages in the country. Of these, only 0.50 per cent have population above 10,000. Around 1.82 percent has a population between 5,000 and 10,000. Almost around 42 percent have population less than 500.

Ø DISTRIBUTION OF VILLAGES :-

41% of India’s middle class resides in rural India

Classification of Towns in India – According to FMCG Companies

Interestingly, for FMCG and consumer durable companies, any territory that has more than 20,000 and 50,000 population, respectively, is rural market. So, for them, it is not rural India which is rural.

Ø DEMOGRAPHIC DETAILS OF RURAL INDIA :-

· About 285 million people live in urban India whereas 742 million reside in rural areas, constituting 72% of India's population resides in its 6,36,365 villages.

· The number of middle income and high income households in rural Indian is expected to grow from 46 million to 59 million.

· Now there are more government rural development initiates.

· There is Low literacy rate .Even there is lowering of difference between taste of urban and rural customers.

· Increasing agricultural productivity leads to growth of rural disposable income.

Ø THE INDIAN ADMINISTRATIVE BLOCKS :-

Ø THE INDIAN RURAL ECONOMY :-

• A marked improvement is seen in the economic prosperity of rural

• There is a 600% increase in budget allocation for rural development (8th to 10th 5-year plan)

• There is a 230% increase in flow of institutional credit for agriculture (’97/’98 to ’04/’05)

• Issue of 4.1Cr Kisan Credit Cards with cumulative credit amounting to Rs. 97,700 crores (since ‘98)

• A marked improvement in Indian agriculture at a macro level is seen over the last 10 years (area covered, yield)

• Rapid rise of rural incomes

• There is transformation in lifestyle, values and aspirations of rural populace with increasing penetration of media forms

• Urban-rural divide is thinning at the top-end of the rural segment

• There is an Exponential increase in demand for goods, services, entertainment forms

• The villager is no longer the person as typified in Hindi movies

UNDERSTANDING RURAL INDIA

Life of the people in rural areas is very simple. They don’t have much leisure in their life. They have a very simple living . Most of them are farmers and their main area of entertainment is visiting haats, relatives, chaurahas etc… They are of very conservative type. Today with men even women are working in rural areas. It completely depends on their financial conditions. Women normally work in farms, sometimes help their husband or make some of the items like chairs, pots etc. Weekly haats or melas are the places where they make their purchases of day to day items and even assesciories like bangles, jewellery etc. The detailed information regarding their mode of entertainment, their approach towards the products, their buying patterns, their behavior etc and even the understandings regarding why corporates are turning to rural areas and the opportunities & challenges in rural areas will be continued below .

RURAL CONSUMER BEHAVIOUR :-

Ø COLLECTIVISM :- (as opposed to the individualism of urbanites)

• They have as strong adherence to prevailing social norms of the community they live in so even the decisions are taken with the communities beliefs and norms.

• The concept of joint family is more prevalent.

• They Enjoy social gatherings – festivals, melas, other celebrations etc . They spend a lot of time chatting with friends and neighbours .

• They are Strongly influenced by opinion leaders & “influencers” - school teachers, medical practitioner (PHC), priests, religious leaders, urbanized relatives, local politicians, the village head .

Ø INFLUENCERS :-

• An Important role is played in decision making by “influencers” in the rural economy

• Unlike in the urban family where “all” are involved in the purchase “decision”, in rural set-ups due to the lack of mobility & “exposure” to markets, decisions are made by the men