This decade should belong to rural India

A (belated) happy new year to all readers of Inside India. 2010 was a peculiar year--it's been termed as the year of scams.
Written by ZDNet Staff, Contributor

A (belated) happy new year to all readers of Inside India. 2010 was a peculiar year--it's been termed as the year of scams. From the Indian Premier League (IPL) scam to the Commonwealth Games scam, 2G spectrum allocation scam and the Adarsh Society scam--we've seen one to many scams in the year that just ended.

I hear the same things at every conference these days--how the financial crisis didn't impact us much, how everyone plans to invest in India and how we will be next super power.

The scams and India's high growth rate are just one side of the story. The real India (or 72.2 percent of India's population) continues to live in villages. Though I can't claim to know much about rural India, a recent visit to rural areas of central India made me wonder whether all I hear (at conferences) and read (in print & new media) is really true.

If I had been to those villages 20 years back (in the pre-liberalization days), I may have been able to give you a better perspective about how things have changed. But my impression today is that even if things have changed in the last 20 years, the change is too little, too late.

If we can't provide electricity, safe drinking water, toilets, primary education, good hospitals, clinics and chemist shops, roads, banking services and security to 70 percent of our population, we shouldn't be talking this big.

The other impression I carried back was that not everyone in a village is poor. There are a lot of rich farmers out there with a 'Below Poverty Line' card (should they be entitled to the welfare schemes?). Growth is reaching villages in some form or the other--youngsters are coming to cities for work and remitting money to their parents in villages, there is construction work happening close by where casual labor is required and there are government schemes like MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act ) giving some kind of employment.

There is a huge opportunity in rural India. Nearly two decades back, FMCG (Fast Moving Consumer Goods) companies came out with small sachets of shampoos and detergents for rural India. Today, over 95 percent of rural households use detergents and soaps.

Then came telecom companies that started offering lower call rates, attractive schemes (like lifetime incoming call free) and cheaper phones to rural customers. The result--India has 706 million mobile phones today.

If people in villages have embraced soaps, detergents, shampoos, TV sets and mobiles, they will surely embrace clean toilets, good schools, good hospitals and chemists, electricity and much else. It's just that not everyone sees an opportunity in rural India.

It's clearly a game of volumes and not high markups. There is definitely a model that almost every industry can evolve. What's needed is the political will to make that happen. Unfortunately, our politicians seem to be too busy siphoning off money and inciting religious and casteist sentiments among both literate and illiterate Indians in the name of vote-bank politics.

The result--people still live in dark ages. They introduce themselves by mentioning their castes. You ask them if it really matters and they look bewildered and amused. Probably no one has asked them that question before.

My own view is that India can (and probably will) leverage technology to address the rural market. Whether it is banking, health, education or even electricity, public conveniences and water--there is an efficient and cost-effective technology just waiting to be explored. For instance, a year back, the Tata Group launched a water purifier at US$16.5 (INR 749). What's needed is the right focus by policymakers to encourage technological innovation for rural India. They need to ensure that business models (for rural India) are (and remain) viable.

I think the successful implementation of Aadhaar (the Multipurpose National Identity Card program) will clear several roadblocks for companies to address the rural market. Once every Indian has a unique identity number, it will be a lot easier to address them with the right product and service. Hopefully, it will be a lot easier to curb corruption as well, which has seeped into the grassroots of the country.

If the 1990s were about liberalization of economic policies, 2000s about IT, telecom and manufacturing, then the 2010s should be the decade for rural India. And if it doesn't turn out that way, I am afraid all our dreams of emerging as a super power and being a reservoir of talent for global needs will remain just that--i.e. dreams.

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