Urban areas in India are experiencing a ground-breaking development in the last few decades. India has a population of 136 crore people, out of which 83 crores people, nearly 60% of the total population, reside in rural areas. People migrate from rural to urban areas for getting employment opportunities. This further contributes to the progress and growth of urban areas. For a couple of years, the focus was to uplift urban areas, this left rural areas in the state of underdevelopment.
But now, the scenario is changing. Along with urban areas, heed is paid to rural areas of India. With issues of land in urban areas, multi-national companies are widening their landscape by establishing their branches in rural areas of India. This leads to the development of rural areas, and by serving employment opportunities, it also uplifts the standard of living of local residents. So, we can say that since the last few years companies and governments are making efforts to develop rural areas of India. All these efforts are resulting in unlocking the purchasing potential of rural markets.
Following are the causes of the rise of the purchasing power of rural markets:
To ease the day-to-day challenges of farmers, the government provides various subsidies on machinery and agricultural products. This helps in loading off the burden of expense and also aids in the effective usage of resources. Moreover, various schemes such as Pradhan Mantri Fasal Bima Yojna (PMFBY), Paramparagat Krishi Vikas Yojna (PKVY), and the like aids in increasing the purchasing power of rural people, who are engaged in Agri-activities.
2. Investment of Multi-national Companies in Rural India:
Foreign companies are expanding their horizons by establishing their companies in rural areas of India, where availability of labour at cheaper rates is in abundance and various infrastructure facilities such as banking facility, electricity, roads, communication facility, etc. are already established by the government to encourage foreign companies to invest in such underdeveloped areas. This unlocks the way for employment opportunities in rural areas, raising the standard of living of people eventually.
3. Infrastructure Facilities in Rural Areas:
After Independence, the government's main focus was to develop the developing cities of India. But since the last few years, the government is putting extra efforts in developing rural India by building a strong infrastructure environment. Government banks are flourishing in more and more villages, along with communication facilities, availability of water and electricity. This also makes it convenient for foreign companies who want to erect their companies in India in rural areas. Better infrastructure empowers the rural people and encourages them to do more, which indeed leads to the betterment of people in rural areas.
4. Awareness of Potential of Rural Market:
Multi-national companies targeted only urban markets for their products and didn't consider rural markets. Recently, companies understood the rich potential of rural markets. According to a survey, a 1% increase in rural income translates into an approximate buying power of Rs 10,000 crore. While companies make value packs for urban markets, a strategic change of sachet packs was introduced to also encourage people in rural areas to buy their products. In this way, companies are also taking steps to make revenue by targeting people residing in rural India. Thus, such awareness from the company's side helps to provide opportunities for rural markets.
Gradually, this way markets in rural areas are opening the doors of possibilities for rural people and companies. Although proper measures are taken from the government's side to provide a conducive environment to people in rural India, it will still take a few years to build a proper required environment which will further aid in the development of rural India.
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