According to research firm Nielsen, the rural market grew faster than the urban market in the first quarter in both volume (9.2% vs. 8.6%) and value (15.1% vs. 12.6%) terms, a development only partly attributable to a good monsoon boosting crop yields.
“Talk around a massive hike in minimum support price (MSP) rates has lifted consumer confidence in rural areas,” the Business Standard noted, while better road connections and improved electricity supplies have resulted in greater availability of FMCG goods and higher sales of household appliances like fridges and TVs.
An example comes in Jharkhand, where the regional government has recently received funds from the National Bank for Agricultural and Rural Development (NABARD) which will enable it to build 18 major road projects that will connect 250 villages and 52 rural haats (open-air markets) and marketing centres.
NABARD research has also highlighted how 88% of rural households and 55% of agricultural households (which account for almost half of all rural households) have a bank account.
India Post is currently on a drive to bring “last mile banking” to households in these areas. According to Suresh Sethi, CEO of Indian Post Payments Bank, India Post already has 130,000 rural points of service across the country compared to the 50,000 offered by all the nation’s banks.
While these will form the initial banking contact, he told TickerNews that “We are then talking about equipping our postal employees with hand-held and biometric devices to be able to offer services at doorstep”.
Sethi also envisages “a very large consumer literacy mission” to explain the implications of “formal financial inclusion” – a process which may also have an impact on consumer spending and saving patterns in rural India.
Sourced from Business Standard, Telegraph, NABARD, Financial Chronicle; additional content by WARC staff