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Others Increase rural income: Day Two focuses on tapping the rural growth opportunities

Increase rural income: Day Two focuses on tapping the rural growth opportunities

Author | Saurabh Turkahia & Shikha Saroj | Thursday, Sep 29,2005 8:12 AM

Increase rural income: Day Two focuses on tapping the rural growth opportunities

Day 2 of CII's 'National Conference on Rural Markets' commenced with an open debate that questioned our knowledge of rural India. Few years back, P Sainath wrote 'Everybody Loves a Good Drought', a book that was trumpeted as a true reflection of rural India. The book portrayed an India where people lived in a hand-to-mouth existence with no access to basic amenities like food, water and sanitation was unheard of.

How much, if anything, has changed since then? Is rural India today close (even partially) to what we urbanites so easily take for granted?

If there was a common thread to what the erudite speakers of the conference said, it was that rural India was very different from what city dwellers imagined it was. Though there are innumerable challenges such as infrastructure and lack of awareness, the initial steps have been taken. Today marketers look at rural India as a channel that is vastly untapped but brimming with growth opportunities.

Annie Duflo, Research Co-ordinator, Centre for Microfinance Research, debunked some myths of microfinance. Dileep Ranjekar, CEO, Azim Premji Foundation, said that urban Indians thought that rural Indians were ignorant and unintelligent. Other myths included that children in villages had to walk miles to attend school and that women in rural areas were timid and did not speak their minds.

The reality, however, is very different. Proof being corporate initiatives like ITC's eChoupal and HLL's Project Shakti, computer literacy that is on the rise and the burgeoning popularity of FMCG products in rural India.

According to Ranjekar, rural India was fundamentally evolving – people had started eating out, parents were keen that children conversed in English and learnt computers and women were active panchayat members. As he said, "Rural India is far more advanced than we actually think it is."

Rakesh Mohan, Deputy Governor, RBI, seconded the above opinions when he said that rural markets were growing and consumption of consumer durables was on the rise in. People in rural areas no longer associated food with only cereals but also fruits, vegetables, dairy products and poultry.

Poverty in rural India, he said, had declined and banks should now adjust to the new realities of rural India. The need of the hour, he added, was to have an efficient supply chain (which currently has too many unnecessary links) in rural agriculture.

Case studies were based on the theme of "Converting Challenges into Opportunities". Ramesh Iyer, Managing Director, Mahindra & Mahindra Financial Services, pointed out that local alternatives to urban products were easily available in rural areas. The challenge was to manufacture and market products that were inexpensive, attractive and durable.

Plenary II with the theme 'Creating New Markets: Sharing Experiences' began with Shantanu Khosla, Session Chairman's opening remarks. S Sivakumar, Chief Executive- IBD ITC Ltd, giving the example of ITC's much lauded e-choupal initiative, showed how a model aimed at rural markets could be financially viable as well as socially desirable.

Throwing light on how could IT paint a bright future for rural markets, Rangnath Salgame, President – India & SAARC region, Cisco Systems, said, "ICT or Information and Communication Technology can create big opportunities for microfinance as well as e-learning and tele-medicine." He also pointed out the potential opportunities in areas of retail through Wal-mart's association with rural folk through e-supply chain.

Giving a marketer's approach to sell watches and jewellery products in rural India, Bhaskar Bhat, Managing Director, Titan Industries, pointed out the differences in urban and rural markets, "While urban Indian buys jewellery for adornment, his rural counterpart does it as an investment. An individualised communication works better in urban India whereas rural communication has to be appealing enough for the entire family and a sense of blend-in rather than stand-out should be attained."

Bhat remarked that amid all these stark differences, Bollywood had brought the two together acting as a great equaliser.

For the session 'Innovating new products for the rural market: Sharing experiences', Rajeev Karwal, Session Chairman, made the opening remarks after which Gulu Mirchandani, Chairman & Managing Director, Mirc Electronics Ltd presented the audience with the innovation plan around Onida's low-end model 'Igo' especially meant for the rural folk.

He said, "Research showed that a large chunk of people don't have C&S connection. This seemed an opportunity, which we rightfully seized. We introduced an in-built DTH platform so that the customer could do away with extra spending on purchasing the set-top box." Mirchandani also suggested that one can also get a good price for a good product in the rural areas, if the rural consumer's needs were understood and that went into the making of the product.

Anil Gupta, Executive Chairperson, National Innovation Foundation strongly put forth a need to understand the rural Indian better, who, contrary to popular belief, was more intelligent, more creative and more diverse than his urban counterpart.

P H Ravikumar, Managing Director & CEO, National Commodity & Derivatives, shared his objective of substituting mandis with virtual mandis with the help of which farmers could sell their produce at a better price. He also shared the initiatives on crop insurance taken through setting up of weather stations that would help anticipate conditions and thereby settle claims in a better way.

The final session of the conference 'Point – Counterpoint on 'Is there a rural urban divide' saw bigwigs like Jalaj Dani, Vice-President, Asian Paints; Suhel Seth, CEO, Equus Advertising; Suman Berry, Director General, National Council of Applied Economic Research; and R Gopalakrishnan, Executive Director, Tata Sons Ltd heating up the session while Rajdeep Sardesai of TV 18 moderated it.

What came out strongly through the debate were that initiatives taken by companies to tap the rural market and that good things had started rolling. However, these initiatives were not enough and a lot more needed to be done. Everyone also agreed that today, needs of rural and urban India were not very different.

Rural India's income is almost growing equally vis-à-vis urban India's income and that over 50 per cent of the GDP comes from rural India. Sardesai admitted to a skew in favour of urban India as far as the programmes made by television were concerned, based on a recent report. Gopalakrishnan asserted that there was need to 'unshackle rural India'. He accused the media of seeing rural India through the misfit icon of Lalu Prasad Yadav.

Anand Mahindra,Past President -CII & Vice Chairman & Managing Director, Mahindra & Mahindra Ltd wrapped up the two day event saying, "The fact that women in rural India are willing to change and better the lives of their children is a heartening feeling. These were two days of discovery and decoding."

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