Rural India Getting Richer? You Bet!

Wednesday, June 8, 2005

The Rediff Interview/R V Rajan, managing director, Anugraha Madison

Anugraha Madison has widely been credited with introducing the concept of rural marketing in India. The company was one of the first marketing firms to realise the potential of rural India and decided to focus on rural marketing. R V Rajan, chief managing director, Anugraha Madison, shares his views with Shobha Warrier on how rural India has changed over the last two decades.

When marketing agencies concentrated only on urban India, why did you decide to focus on the rural market?

My foray into the rural market was not deliberate. It so happened that when I came to Chennai from Mumbai in 1974, I found that most of the clients belonged to the agriculture and fertiliser sectors. So I had to deal with farmers.

When Sam Balsara of Madison came down to Chennai looking for an associate, we decided to have a joint venture and position ourselves as rural specialists mainly because of my experience in the field.

Although I have been involved with rural communication and marketing for the last two and a half decades, the positioning of Anugraha took off only after the joint venture. Anugraha Madison is now the rural division of Madison Communications.

In the last two and a half decades, how much has rural India changed in its aspirations, attitude and consumption?

Rural India has changed tremendously. The data published by the National Council of Applied Economic Research shows that in the last ten years, the income of rural India has grown several-fold. There is a definite shift from middle to upper middle class and from lower to middle class segments.

Is the shift due to the growth in Indian agriculture?

For the last 10 consecutive years, we have had good monsoons. So, agriculture is prospering. Of course, there have been setbacks in the last couple of years.

Another interesting aspect is, today rural India is not 100 per cent dependent on an agrarian economy. Unlike in the past where the ratio between those who involved in agriculture and in other business was 75-25, today the estimated ratio is 50:50, if not 60:40.

So today, 50-60 per cent of the rural population is involved in other businesses. A lot of people belonging to the second generation are getting white-collar jobs in nearby towns. So, there is a growing middle class with a monthly income in rural India and it is a drastic change from the past where their income was totally dependent on the monsoon, cropping season, etc.

This has resulted in a definite growth in the prosperity level in rural India. Of course, there are still a lot of poor people, especially the agricultural labourers. But there is a growing middle class with regular income and the rural rich are becoming richer.

Story found here.