The document discusses various government policies and private initiatives that have contributed to rural development in India. It outlines policies like investments in agriculture, the green revolution, and rural healthcare and education initiatives. It also discusses growing rural incomes, aspirations, markets, and the potential of rural areas. Overall, the document provides an overview of the major factors driving rural development and growth in India.

1.  FAVOURABLE GOVERNMENT POLICIES
 Investment in agriculture and rural development
through five year plans
 Green revolution
 Agriculture education, research and extension
 White revolution: Milk production increased from
47 mio tonnes(1950) to 150 mio tonnes (2009).
Still only 20% of the milk is processed

2.  VISION (2020) BY Dr Abdul Kalam
 Focus on PURA i.e. providing urban
facilities in rural areas- education, health
care, sanitation, roads, communication,
employment opportunities- for
development of rural sector.

3.  Adi Godrej, Chairman of Godrej has observed “
The rural consumer is discerning and rural
market is vibrant. At the current rate of growth, it
will soon outstrip the urban market. The rural
market is no more sleeping- but we are.”

4. Govt measures for rural development
 Total sanitation campaign in operation in 590
districts in the country
 Kuti Jyoti programme to provide single point light
connection to rural households
 Mid day meal scheme: 14 crore children covered
under the programme
 National health mission to prove health care
facilities to remotest househols

5.  At present only 300 out of 604 districts
have medical colleges.
 To overcome acute shortage of doctors in
rural areas, the Government has plans to
start a unique three-and-a-half-year
bachelor course in medicine for students
from villages.
 Doctors have to work only in rural areas

6.  National Rural Employment Guarantee
scheme started in 2007-2008. Provided
employment for 100 days a year for 3.5
crore households in rural areas.
 Pradhanmantri Gram Sadak Yojana to
provide road connectivity to villages above
2000 population
 National Food Security Mission to increase
production of wheat, rice and pulses

7.  HDFC & SKS Micro Finance : Housing
loan
 Project to provide loans for improvement
of dwellings primarily to low income
women clients in Andhra Pradesh.
 The loans will be in the range of Rs
50,000-1.5 lakhs for a tenure of 3-5 years.

8.  Transition in Rural Society
 Due to increase in literacy level, income,
reach of mass media, more employment
opportunities , rural people are leaving
caste based occupations, traditional belief,
traditional life, joint family life and servant
master relationship and moving to towns
for a better living.

9.  Rural people want to replicate the life style
of urban people.
 Agricultural development contributes
towards self sufficiency in food production
as well export of agricultural commodities
to earn foreign exchange. There is mobility
of labour from agriculture to industrial
sector. This has lead to shortage of labour
in villages particularly during peak
agricultural season

10.  About 70 crore population continue to live
in villages and industries cannot absorb
such a huge population.
 Therefore development of agriculture
industries, handicrafts, institutional credit,
minimum wages, infrastructure, social
security etc have to be taken up for over all
development of rural sector.

11.  PRIVATE INITIATIVES
 Agricultural input companies
 Consumer goods companies
 Software for land records, community
certificate, commodity prices
 e-choupal

12.  MEDIA EXPLOSION
 Expansion of regional TV, e-seva( AP), Bhoomi
project (Karnataka), Project I shakti (HUL)
 ASPIRATIONS OF RURAL PEOPLE AND
ATTRACTION OF HIGH STANDARD OF
LIVING:
 Rural youth forms a distinct segment of the
population. They are modern, knowledgeable and
receptive to changes than their elders. They value
material comforts like TV, two wheelers, ready made
garments, cosmetics etc

13. GROWTH IN INCOME:
 Modern farming methods
 Cultivation of cash crops
 Poultry, dairy, small scale industries
 Movement of people to cities and remittance
of money from NRIs etc
 Cotton and Village Industries
 Hotels, Transport, Insurance, Banking, BPO,
Education Centres, Traders
 Government Welfare Schemes
 Service Class working in nearby towns

14.  NEED FOR EXPLORING THE GROWING
RURAL MARKETS
 Severe competition in urban markets
 To treat agriculture as a business
 Creates employment opportunities Example:
Fisheries, Insurance, BPO operations,
development of industries
 Rural tourism: Example: Rural areas of
Rajasthan, Plantations in South and East, Wine
tourism in Maharashtra

15.  Over 70% of the population lives in rural
areas
 Increase in disposable income
 Less foreign competition
 Brand loyalty, Product life cycle advantage
( Washing powder growth 6% in urban and
20% in rural)

16.  HOW TO IDENTIFY POTENTIAL
 Main occupation is Agriculture for about 70% of
rural population. Potential of the rural market
depends on
 Irrigation facilities
 Types of crops/varieties grown
 Size of the farm
 Cultivation practices
 Use of agri inputs and agri machinery

17.  URBAN ORIENTATION denotes the degree to
which a rural consumer would like to replicate the life
style of urban consumer. Examples: Villages close to
towns and centres , villages connected by public
transport facilities.
 FEEDER MARKETS/MANDIS
 Rural consumers by durables from class 2 towns
(50,000 to one lakh population) and class 3 towns(20,000
to 50,000): There are 500 class 2 towns and 1500 class
3 towns

18.  THOMSON RURAL MARKET INDEX
 HTA has identified the relative potential of 355
districts in our country based on 26 parameters
 Population, number of villages, literacy, no of
cultivators/agricultural labourers/non cultivators,
cropped area, irrigated area, area under food
crops/non foods crops, average size of the farm,
fertiliser consumption, no of tractors, electrification,
no of rural branches of banks, deposits, advances,

19.  THOMSON RURAL MARKET INDEX
 Classification of Potential Markets
Class of markets No of districts %
A 22 17.80
B 39 20.50
C 54 20.40
D 86 23.00
E 154 18.30
total 355 100

20.  RURAL CONSUMERS
 The landlords
 Affluent farmers
 Small farmers ( 1-2 ha of land)
 Marginal farmers( upto 1 ha of land)
 Tenant farmers
 Agricultural labourers
 Traders( Agri produce/merchants)
 Petty traders/artisans
 Service class
 Unemployed /underemployed people

21. QUALITIES OF OPINION LEADERS
 Credibility
 Positive and Negative information
 Information and advice
 Category specific
 Examples: Rural educated youth, village
president, teachers, painters, mistry etc

22.  Rural market is growing since 1980s
 Bigger than urban market for FMCG and
Durables with 53% and 59% respectively
of the total market
 Market size: 1,23,000 crores consisting of
about 70,000 crores for FMCG/durables,
45,000 crores for agriinputs and 8000 for
2/4 wheelers.

23.  LIC sold 55% of the policies in rural India
 About 30% of the mobile users in rural
areas
 41 million kisan credit cards issued
exceeds 22 millions credit/debit cards
issued in urban India

24.  The number of middle and higher income group (
Rs 70,000 plus income) in rural (21.7 million)
and urban (24.2 million) are nearly the same.
 Many companies are active in rural market:
Example: HUL 50%, Colgate 40%, Hero Honda
40%, LG 40%, Cavin care 40%, Godrej 30%,
Cadbury 30%, Bharti Airtel/Vodafone(30%) (
2008)

25.  Products that are well established in
Rural market:
 Bicycles, motor-cycles, agri inputs, tractors,
radio, coffee, tea, tobacco, bathing and washing
soap and textiles.
 Products that have entered the markets
in recent years:
 Ready made garments, baby care products,
packaged food stuffs, consumer durables,
cosmetics and toiletries, mobile phones,
computers

26.  Rural consumption is more compared
to urban market:
 Bicycles, mechanical watches, tailoring
machines.
 Products where rural consumption growth
rate is higher than urban markets:
 Packed tea, bathing and washing cake

27. PRODUCT RURAL URBAN
Bicycles 78% 22%
Radio 79 21
Mechanical watch 76 24
Washing cake 68 32
Black and white TV 63 37
Colour TV 29 71
Washing machine 15 85
Refrigerator 24 76
Nail polish 23 77
Toothpaste 39 61
Shampoo 25 75
Face cream 28 72
Tooth powder 79 21

28.  HIERARCHY OF NEEDS
 Category A( Immediate use to the family):
Bicycles, wrist watches, radio, electric fans
 CategoryB(Breaks the monotony of house
work and source of entertainment): Sewing
machines, stereo set, B & W TV
 Catergory C (Supplement income,
entertainment and comfortable house hold
working) : Colour TV, Moped, Motor cycles,
Refrigerators

29.  SOCIAL CLASS
The rural society consists of a hierarchy of
classes or grades of people. Social class is
determined by a combination of factors such as
education, occupation, income, wealth etc
The type of durable owned by a household gives
an indication of the grades of people

30. Category Products 1995-96 2006-
2007
The affluent Jeep/Car 1.6% 5.6%
The well-off Motor cycles, 2.7 5.8
AC,Colour TV.
Refrigerator
The climbers Moped,B&W 8.3 22.4
TV, Audio,
Grinder
The aspirants Bicycle, fans, 26 44.6
iron
The destitute Watches, radio 61.4 21.6

31.  Physical distribution
Transportation, warehousing, communication
 Channel management
Multi-tier system: Example
Depot/C&F agent>distributor in major town,
Stockist at taluk level, wholesaler in agricultural
centres/block level and retailers in villages

32. Channel management
 Limited availability of retailers
 Poor viability of dealers
 Fewer brands
 Inadequate banking and credit
facilities

33. Rural retailer Average daily
turnover (2000 &
below population)
South Rs 562.00
West Rs 404.00
East Rs 371.00
North Rs284.00

34.  AVERAGE NUMBER OF
BRANDS PER DEALER
Products Rural Urban
Toothpaste 3 7
Tooth brush 3 6
Biscuits 3 9
Hair oils 3 7

35.  SALES FORCE MANAGEMENT
 Fluency in local languages
 Knowledge of product, market and competition
 Basic knowledge of agriculture
 Knowledge of cultural factors: Preference for experience,
look for value for money, don’t make impulse purchases,
prefers sturdy products, greeting elders with folded
hands etc

36. SALES FORCE MANAGEMENT
 Knowledge of different type of customers
 Selling skills
 Capacity to work extended hours
 Ability to put up with inadequate boarding and
lodging
 Trust and understanding while dealing with
customers

37.  RURAL PROMOTION
 UNDERDEVELOPED MARKETS AND CONSUMERS
 Low income
 Seasonal income
 Low literacy
 Traditional belief/ occupation/ life

38.  PRODUCT
 Examples: Small Unit pack, Sturdy products, No
frills product etc
 PRICING
 Examples: Post harvest schemes, Extension of
credit to channel members

39.  BRAND PROMOTION THROUGH RURAL YOUTH
 RURAL COMMUNICATION
 Examples: Farm to farm visit, Group meeting of
rural consumers, AVP vans
 OPINION LEADERS
 DISTRIBUTION
 Availability
of products with village retailers for
FMCG goods