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IIM Lucknow Experiences of the IPMX students @ IIM Lucknow

Leadership Interaction Series »

Power of Rural India- Talk by Mr


Pradeep Kashyap- CEO and Founder, MART
THURSDAY, AUGUST 19, 2010 LEAVE A COMMENT

Mr. Pradeep Kashyap, CEO and Founder, MART

We got amazing insights this Tuesday, when Mr. Pradeep Kashyap, CEO and Founder, MART, also

considered father of rural India, delivered an informative lecture on the power of rural India and its role in the

growth of Indian Economy. The Q&A session went on as long as the session itself, continuing well into the high

tea whereby Mr Kashyap managed to evoke enthusiastic curiosity amongst a normally urban smitten audience.

We were all taken by the sheer power of rural India and its role in the growth of Indian Economy over the last

decade and the potential for future. Clearly, it is a BIG asset today as opposed to a liability that we had grown

up thinking.
We are realizing the potential of the vast market that had been untapped so far. About 70% of the Indian

population resides in our villages and they account for 60% of FMCG market, 57% consumer durables and

40% two-wheelers. As the transportation is improving, the villages are becoming electrified and the literacy rate

is improving due to heavy investment and focus by the Indian Government, the scene of Rural India is

undergoing an image transformation over past 7-10 years

One of the biggest advantages is that rural sector was instrumental in guarding India from the Global Economic

meltdown. During the last 1-2 year recession period, there has been no growth in urban sector, but all the

growth that occurred in Indian economy is solely due to rural sector. 600,000 villages saved the 5136 odd

towns and cities that together make up our country. There was no wealth erosion simply because all the

impacted sectors (IT, real estate and stock market) did not have a role to play in the rural market! People

construct houses to live, not for investments and of course there are no IT companies or stock markets to

bother here.

Going back to statistics, rural India accounts for 0.5 Trillion USD today (this has been the growth until now i.e.

in 60 years) and it is expected to cross 1 Trillion USD in the next 10 years i.e. by 2020. This is the total

economy for Canada.

In 50 years (1950-2000) we managed to have road connectivity to 50% villages. In the next 10 years (2000-

2010) another 30% villages have been connected! 21% teledensity with 0-> 180 million connections has been

accomplished over last 5 years. On an average each family in rural India has a mobile phone today! Could we

ever envisage this?

Everything's seem to be going well on rural marketing front whereby domestic as well as Multinationals have

recognized the market potential due to sheer volume of population. The only jarring note is agriculture as the

farmers are still the poorest with their per capita income less than half of those in any other sector. The service

people are definitely the best off. Fortunately the Rain God and Government God ( yes, Mr Kashyap used

these two terms ;)) have been very kind over last 10 years and we had 8 out of 10 good monsoon seasons as

opposed to an average of 5 out of 10. Toda, the people in villages spend about 43% of their income on food as

opposed to 58% back in 2000. This number is projected to further reduce to 33% by year 2020 that is the
amount invested by urban man on food

today! The needs to the village man are

clearly becoming more and more

urbanized giving cues to all the

companies out there to reach out to this

new market with customized products.

The growth rate of Rural India is at an all

time high of 13.5% and some of the

projections are as follows:

Healthcare: 24.4% today to 55.6% by 2020

Education: 24.4% today to 55.6% by 2020

Transportation: 44.4% today to 80% by 2020

Communication: 3.3% today to 8.9% by 2020

We can comfortably look up to Rural India for leading Indian Economic growth. The only factors that can

possibly go wrong are failure of monsoons or a shift in the priority of Government. The latter is unlikely ,

therefore, we should gear up to a rural economy led growth and here's a message to all the companies out

there....come and explore, rather explode the potential of our rural market to reap benefits for one and all !