Rural India: A force to reckon with

Thu, 3 Oct Pre-Open

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Until few years back, the mention of Indian villages brought to the mind images of farmers tilling the agricultural land and at the mercy of rain gods, and dark evening hours lit with kerosene lamps. However, things stand much different now. Over a period of time, the Indian rural economy has become a force to reckon with. It is no longer about a mass population relying on subsistence farming. The gap between urban and rural India is bridging. A very simple example of this is the TV and mobile sets that are a common sight in the villages of India.

As urban markets are getting saturated, even the corporates are tapping the rural markets. And why not? The fact that around 65-70% of the country's population resides in rural areas itself speaks of the enormous potential this segment has to offer.

So what has brought this sea change for the rural population in India? As per an article in the Economist, two Indian villages just 15 km apart in location stand far apart in terms of their development. The one that is ahead has enjoyed road connectivity since 2009. And that might explain almost three times the property rates and better wages that its residents enjoy as compared to the other one.

The policymakers should take a note of this. The Indian economy is in a mess because of various fuel, food and fertilizer subsidies doled out to the masses. This acts as a disincentive for people to put in efforts and contribute to the growth in the economy and instead makes them a liability. In order to empower people in the truest sense, we need to reallocate resources towards creating infrastructure (especially logistics and transportation), technology and education and job creation. Instead of wasting money on populist measures, if the Government spends it wisely to create opportunities for this segment, it will not just become self sustainable but can give the much needed boost to the Indian economy.

To devise effective policies for this sector, one needs sound information. However, the much published and discussed statistics on the country's economy has not been able to capture contribution of the rural segment and its evolution over the years. We definitely have a long way to go before this segment gets its due account, but the revolution needs to start with a realistic picture for which we need reliable and complete statistics. Unless we have the latter in place, we cannot expect to tap the segment's vast growth potential.