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RURAL ECONOMIC SCENARIO

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Rural Marketing – Course Plan Details

Issues, Opportunities & Challenges

Rural Marketing Environment The Rural Economic Scenario

Rural Economic Structure Incomes & Consumption Physical Infrastructure Marketing Infrastructure Commercial Infrastructure and Govt.

policies

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DISTRIBUTION OF RURAL HHs BY INCOMEANNUAL INCOME IN Rs.AT

1998 – 99 PRICESINCOME CLASS 1989 -90

(% HOUSEHOLDS)1998 – 99

(% HOUSEHOLDS)

<=35000 LOWER 67.3 47.9

35001-70000 LOWER MIDDLE 23.9 34.8

70001-105000 MIDDLE 7.1 10.4

105001-140000 UPPER MIDDLE 1.2 3.9

> 140000 HIGH 0.5 3.0

TOTAL 100 100

•Rural Annual Per Capita Income is Rs. 9481 vs Rs. 19407 in Urban•Highest Rural Per Capita Income is Punjab (Rs. 27256)•Lowest Rural Per capita Income is Orissa (Rs. 5704)

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RURAL ECONOMIC STRUCTURE

RURAL ECONOMY

FARM SECTOR NON-FARM SECTOR

AGRICULTURE

ANIMAL HUSBANDRY

HORTICULTURE

FORESTRY

FISHING

INDUSTRIES SERVICES

AGRO-PROCESSING

MANUFACTURING

MINING/QUARRYING

CONSTRUCTION

RETAILING/TRADING

COMMUNITY/SOCIAL SERVICE

TRANSPORT/STORAGE

COMMUNICATION

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SPLIT OF RURAL INCOMES

RURALINCOMES

AGRICULTURE53%

NON-AGRIC.47%

SELF

EMPLOYED

43%

WAGEEARNER10%

FORMAL31%

INFORMAL

16%

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SPLIT OF RURAL POPULATION

RURALPOPN.

AGRICULTURE73%

NON-AGRIC.27%

SELF

EMPLOYED

40%

WAGEEARNER

33%

FORMAL15%

INFORMAL

12%

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PER CAPITA INCOME

RURALPOPN9941.

AGRICULTURE6855

NON-AGRIC.16464

SELF

EMPLOYED

10150

WAGEEARNER

2860

FORMAL19514

INFORMAL

12595

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RURAL INFRASTRUCTURE

• ROAD CONNECTIVITY• 49% - <1000; 75% - 1-1500; 78% - > 1500• Pradhan Mantri Gram Sadak Yojna will cover 160000

habitations with investment of Rs. 60000crores

• POST OFFICES• 138756 (March, 2002). Avg coverage 6614 pop • MEDIA• Radio - 208 Stations - 98.8% population• TV – DD 1042 transmitters – 7.5 crore homes• Press – about 15% of total India• Telecom – 80% VPTs. Total connections - 1.23 cr• Mobiles – Over 50 lakh ……and growing! • ELECTRIFICATION• 86% Villages electrified but 48% have access.

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RURAL INFRASTRUCTURE• SOCIAL• Health – 137292 sub centres;22807 PHCs and

3027 CHCs• Each sub centre has 1 each multipurpose male

and female worker• Each PHC has medical officer + 14

paramedics/others. Acts as referral unit for 6 SCs & has -6 beds

• Each CHC has 4 medical specialists (surgeon, physician, gynaec & paed.) + 21 paramedics/other staff. 30 beds + X Ray, labour room, OT, labs. One in 4 CHCs has facilities for obstetric care and specialist consultations.

• EDUCATION• 12,28,501 EDU. INST. • PUBLIC DISTRIBUTION SYSTEM• 4.76 Lakh Fair Price Shops – cover 4 crore out of

11.2 crore HHs

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Marketing/Commercial Infrastructure

• Marketing Infrastructure– Mandis– Haats– Melas– Shops

• Commercial Infrastructure– Regional Rural Banks– Scheduled Commercial Banks– Cooperative Banks

• Government Policies

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Marketing Infrastructure• MANDIS

– Agric markets for procurement of produce directly from farmers. Therefore, Cotton Mandi, Grain Mandi, Soya Mandi etc.

– Agric areas with popn > 10,000 have mandis with one mandi catering to 136,000 population.

– Price quoted depends on qty, specs, pkg, dely terms, payment method etc.

– Great location for high value products like durables, farming implements/products as also key services like Insurance, mobile phones etc.

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Marketing Infrastructure• HAATS

– Approx 42,000 Haats, mainly in 11 states ie. U.P., Bihar, West Bengal, Maharashtra, Orissa, Assam, Jharkhand, Chattisgarh, M.P., Karnataka, T.N.

– Of these 35,000 are weekly. Depending on size are called “Bada” Haat & “Chota” Haat.

– First point contact between villagers & market– Means of distributing local products/exchanging

rural surplus– An opportunity to buy daily use products– A place for social, cultural and political contact– Haats in fixed locations and some over 140 years

old

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Haats – Facts/Outlet Categories

LEGEND NUMBERS

Avg no of visitors 4580

Avg no. of villages

14

Avg no of stalls 314

Avg sales per day 2.23 lakhs

Agricultural Products 39.5

Forest Products 2.1

Handlooms/Handicrafts

8.4

Processed Foods 13.2

Fish, meat & Poultry 3.2

Manufactured goods 24.3

Services 3.3

Others 6.0

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Marketing Infrastructure• MELAS (Fairs & Festivals)

– Approx 25000 Melas, of which 500 are major– Associated with Season, Phases of the Moon,

Movement of planets, Birth/Death of mythological figures/incarnations

– Serve as gathering of people away from their residences for entertainment and for the sale and purchase of goods and services at a particular time

– Could be one day, 2-7 days or even longer– All over the country

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Melas – Facts/Outlet Categories

LEGEND NUMBERS

Avg no of visitors 7,60,000

Avg no. of stalls 854

Avg sales per day 2,43,00,000

Agricultural Products

5.6

Forest Products 0.1

Handlooms/Handicrafts

15.6

Processed Foods 19.5

Entertainment 4.0

Manufactured goods

42.5

Services 4.2

Others 9.0

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Marketing Infrastructure

• SHOPS– Other than Haats/Melas, total 1.33 crore

shops in India, both urban and rural– Of these, estimated 55 lakh shops in Rural– Categories include Grocery Store, Kirana

Store, Chemists, Paan shops, chakkis, tailors, barbers and cycle repair shops.

– Major percentage ( est 80-85%) and grocery, Kirana, Chemists and Paan shops.

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Commercial Infrastructure• REGIONAL RURAL BANKS

– Established in 1976 by an Act of Parliament– For promotion of Agriculture, Trade &

commerce and Industry.– For extending credit to small & marginal

farmers, agricultural labourers and small entrepreneurs

– 14,777 RRBs in place. Of these 20 have issues share capital of Rs. 1 crore and balance of Rs. 75 lakhs

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Commercial Infrastructure

• SCHEDULED COMMERCIAL BANKS

– The normal commercial banks .– Out of 65, 413 branches in India,

37,098 are in rural areas– Big impetus given to this after

nationalisation of key banks in 1969 by Indira Gandhi

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Commercial Infrastructure• COOPERATIVE BANKS

– 3 Tier Pyramidical structure– Apex body is STATE COOPERATIVE BANK ( SCB - 30 with 847

branches)– At Intermediate Level is DISTRICT CENTRAL COOPERATIVE

BANK (DCCB – 368 with 12652 branches)– At grass roots level is PRIMARY AGRICULTURAL

COOPERATIVE SOCIETY (PACS- 98247)– For long term credit, STATE COOP. AGRIC & RURAL DEVT.

BANK (SCARDB – 20) and PRIMARY COOP. AGRIC & RURAL DEVT BANKS (PCARDB – 768)

– Of late URBAN COOP BANKS also provide credit to agriculture

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Government Policies• CHANGING RURAL INFRASTRUCTURE

– PRADHAN MANTRI GRAMODAYA YOJANA (PMGY) – with fund allocation of Rs. 5000 crores for infrastructure devt, of which 50% for roads thru PRADHAN MANTRI GRAMIN SADAK YOJANA which will connect 70% villages by road by 2007 (in 2002 – 40%)

• EMPLOYMENT OPPORTUNITIES

– PRADHAN MANTRI ROJGAR YOJANA (PMRY) – self employment of educated unemployed rural youth thru Panchayati Raj structure

– SAMPOORNA GRAMEEN ROJGAR YOJANA (SGRY) – giving food security and gainful employment with 50 lakh tonnes free food grains and 5000 crores cash for wages/material

– SWARNAJAYANTI GRAM SWAROJGAR YOJANA (SGSY) – A holistic programme for self employment among rural poor

– RURAL EMPLOYMENT GUARANTEE BILL – just passed in Lok Sabha

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Government Policies• RURAL HOUSING

– INDIRA AWAAS YOJANA (IAY) – for 13 lakh housing units annually in rural. Gram sabha selects beneficiaries and 93 lakh hoses built till 2003 with spend of over 16,000 crores

• DISTRICT RURAL DEVT. AGENCY (DRDA)– For implementation of anti-poverty

programmes. Each DRDA has following wings• Self Employment• Women’s• Wage employment• Engineering• Accounts• Monitoring & Evaluation• General Administration

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Government Policies• PROVIDING INSTITUTIONAL FINANCE

– NABARD – various schemes including Kissan Credit Card, Agriclinic and Agri business centres, Refinance scheme for Farmer s Service centres (FSCs)

• LAND REFORMS– Redistribution of land to landless from

surplus of large landholders. Esp W. Bengal.– Protection of tribal lands– Construction of slum dwellings– Introduction of Land ceiling act.