Wednesday, 3 August 2016

How they struggle for their existance..

The weak results announced by Hindustan Unilever a few days back indicated that the stress in the rural economy continues to persist even as analysts hope a strong monsoon this year turns things around. The widely-propounded theory behind the rural slowdown is that it was caused by the back-to-back drought years in 2014 and 2015 but renowned consumer economy expert Rama Bijapurkar says there is a second culprit too. "Both gods and the government have not been kind to rural India," she said, lending credence to a belief that even the NDA government had gone light on its rural stimulus. She added that a turnaround may finally be under way and that pick-up in the rural economy could take place by October-November period. But she said the larger question is that if there is disparity between the growth rates of rural and urban segments, have consumer companies really focused on the latter? She maintained that the richer segments of the country were actually under-served and companies would do well to have a portfolio that caters to it but even here, even as she said that an opportunity continues to exist in the unexplored hinterlands of rural India. ("Go where no one has gone before".) To that extent, she said Patanjali was doing a good job in creating new markets. "Patanjali is telling the consumer: 'I am offering you different-but-better for cheaper and so adding more value'." But to sum up, she said even such a strategy had its limits. "How many more times are you going to have a bath if you have an interesting soap," she asked. "What I am suggesting to you is that perhaps FMCG is now lot less exciting as a space compared to other spaces." Wouldn't the government's Seventh Pay Commission hikes help in kick-starting consumer sentiment, thereby benefiting FMCG companies? She said there was little direct correlation between macro indicators and companies' performance. "Even so, just because in the 90s, higher [government employee] incomes got spent on durables doesn't mean it will again be spent on them," she said. "Consumer choices are dependent on time. Maybe this time they will go into mutual funds and financial services given that real estate is not a good place to be.” The country has been successful in reducing the proportion of poor people from about 55 per cent in 1973 to about 27 per cent in 2004.

But almost one third of the country’s population of more than 1.1 billion continues to live below the poverty line, and a large proportion of poor people live in rural areas. Poverty remains a chronic condition for almost 30 per cent of India’s rural population. The incidence of rural poverty has declined somewhat over the past three decades as a result of rural to urban migration.
Poverty is deepest among members of scheduled castes and tribes in the country's rural areas. In 2005 these groups accounted for 80 per cent of poor rural people, although their share in the total rural population is much smaller.
On the map of poverty in India, the poorest areas are in parts of Rajasthan, Madhya Pradesh, Uttar Pradesh, Bihar, Jharkhand, Orissa, Chhattisgarh and West Bengal.
Large numbers of India's poorest people live in the country's semi-arid tropical region. In this area shortages of water and recurrent droughts impede the transformation of agriculture that the Green Revolution has achieved elsewhere. There is also a high incidence of poverty in flood-prone areas such as those extending from eastern Uttar Pradesh to the Assam plains, and especially in northern Bihar. Poverty affects tribal people in forest areas, where loss of entitlement to resources has made them even poorer. In coastal fishing communities people's living conditions are deteriorating because of environmental degradation, stock depletion and vulnerability to natural disasters.

A major cause of poverty among India’s rural people, both individuals and communities, is lack of access to productive assets and financial resources. High levels of illiteracy, inadequate health care and extremely limited access to social services are common among poor rural people. Microenterprise development, which could generate income and enable poor people to improve their living conditions, has only recently become a focus of the government.
Women in general are the most disadvantaged people in Indian society, though their status varies significantly according to their social and ethnic backgrounds. Women are particularly vulnerable to the spread of HIV/AIDS from urban to rural areas. In 2005 an estimated 5.7 million men, women and children in India were living with HIV/AIDS. Most of them are in the 15-49 age group and almost 40 per cent of them, or 2.4 million in 2008, are women (National AIDS Control Organisation).
 The India Vs Bharat debate is not new. The Urban –Rural divide has been debated for years together. There seems to be little progress made over the last seven decades in bridging this gap. The gap only seems to be widening by the day. The recently-released India Rural Development Report, which is endorsed by the government, says 7% of the rural population is ‘very poor’; villages in eastern Indian states are the worst affected. It’s a concern for any Govt. what so ever…