Growth Potential: Rural Market

                   It is true that 70% of India’s Gross Domestic Product (GDP) is contributed from the urban part of the nation. But what about the rural population, that constitutes 70% of India’s aggregate population?  The rural market group offers an extremely strong potential for growth.

                   India still being an emerging market is on its way to become a major economic power, promising great sustainable industrial growth with compatibility in being environmentally friendly. All left behind, there are still major challenges being faced by the Indian economy-400 million people in India are not connected to the power grid, and more than 800 million are in the need for basic healthcare utilities.

                    The rural-contribution deficit in enhancing the economic growth is faced with barriers; top in the list being the lack of infrastructure services in the rural regions. Villages are sparsely populated and located with minimal infrastructure provisions, with most of the villagers solely relying on the agriculture production. Clearly, better distribution efficiency is imperative for sustainable and profitable growth in the Indian rural markets. 

                  Consider the telecom industry- India is one of the world’s fastest growing telecom sector, with the second largest wireless connectivity; though this peculiar scenario of the telecom industry, India has an untapped market on the rural level, which promises rapid growth in the rural uplift of the nation. Tele-density in the urban regions was nearly 75% as compared to 13% in the rural areas (in 2006); this rapidly widening divide between urban and rural tele-density can be attributable to the barriers that conflict towards the development of the telecom services in rural India, such as the uneven population spread and the huge network coverage required, which requires higher investment costs. These forbidden and untapped regions are being focused through various initiatives being implemented by the stakeholders.  “Wireless is the only way to reach corners of India”- Technologies like HSPDA, WiMAX, UMB, and LTE will play an important role for connecting rural India.

            The Government has been structuring the telecom regulatory environment in India since the incubation of the TRAI in 1997. Roaming charges will no more be applicable-most of you viewing this would have heard about it lately; the National Telecom Policy 2012 has been elegantly articulated taking corrective measures on the backlogs of the previous telecom policies and has aimed to boost transparency and revive growth in the telecom sector. The primary objective of this policy is to provide availability of 'affordable and effective communications' to the citizens. Rather than the direct revenue generation, which now shall be the secondary objective, directed by this policy.

                 The bottom line to this post conveys that the growth potential of the rural community in India can change the paradigm we live in and can serve the nation’s wealth by creating jobs, improving service delivery within and around the rural market, improving the macro-economic reputation of India. To enjoy a rapid growth in such markets, the rural market development must be persuaded, not just by the political decisions, but also through an entrepreneur’s perspective, looking to benefit every untapped opportunity. 

(References:

http://www.slideshare.net/deepakpareek/connecting-rural-india

http://www.medianama.com/2012/06/223-indias-new-telecom-policy-2012-whats-changed-additions-omissions/)

-Abhishek Deshpande