Tuesday, May 26, 2009

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No Impact Of Economic Slowdown On The Rural Economy | bench3

 
Rural Orientation Indian economy is peculiar to the extent that it has a lot more rural orientation than most economies of the world. Majority of the countries in the world are dependent on their industrial centres and rapidly growing cities for maintaining their growth rate. In India, though industries and the services sectors are centred around the industrial and urban areas, yet over 60 per cent of the work force is directly or indirectly dependent on the primary sector.

This sector contributes about one fourth of the total GDP and offers tremendous potential for growth in the near future. Being a low income segment, this also does not get influenced easily by extraordinary economic situations. As per the views of the Rural Marketing Association of India, there has been no impact of economic slowdown on the rural economy of India. A nation-wide study carried out in the rural markets of the country found out that the rural markets in the country actually offer an opportunity to the marketers to come out of current economic crisis.

Main reasons for such immunity are stated to be higher percentage of total expenditure on food items and the fact that majority of the population is involved in self-employment occupations, having no fear of loss of jobs. The telecom sector has witnessed a rapid growth in the villages and small towns. The total telecom subscriber base for India grew from 70.83 million in the first quarter of 2008 to 90.98 million in the second quarter. Out of this growth 71 per cent rise in this sector came from the rural India, while the urban areas accounted for the remaining 29 per cent growth. 

The study also brings out that more than 72 million Kisan Credit Cards are in use in the rural areas of the country, which number almost matches the number of Credit Cards under use in the urban areas. During 2008, larger part of growth of Fast Moving Consumer Goods (FMCG) came from rural and sub-urban markets. Majority of the people in the rural areas do not invest in stock markets and park their savings in low risk portfolios like post office/bank savings or fixed deposits. The government of India was quick to realize this and immediately after the recession began to show its impact began to direct its economic policies towards the rural sector. 

Fortunately for the country, at the critical juncture when the great recession knocked at the doors of Indian economy, several government sponsored programmes involving huge public expenditure in the rural areas were already being implemented. 

Related Topic:
Interim Budget 2009-10 Gives Importance To Rural Economy
Importance Of Rural Economy In India - The New Mantra

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Haja Peer Mohamed H, Software Engineer by profession, Author, Founder and CEO of "bench3" you can connect with me on Twitter , Facebook and also onGoogle+

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