Hope from the hinterland

Forbes India looks beyond the dark clouds amid consumption slowdown

Samar Srivastava
Published: Sep 13, 2019 01:23:24 PM IST
Updated: Sep 13, 2019 02:42:49 PM IST

After studying law I vectored towards journalism by accident and it's the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably now tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me, there are plenty of those in Asia at the moment.

g_121101_bg_overviewimage_shutterstock_546067342_280x210.jpgImage: Shutterstock

There’s no mistaking the importance of Indians who live beyond our towns and cities. Comprising 68.8 percent of our population, there’s every chance of them becoming the world’s next billion consuming class—even if for now the road may be a little bumpy. It’s this journey that Forbes India set out to track in our special package: Beyond Suburbia. 

Flat prices for agricultural produce and fewer construction jobs have meant tough times for a bulk of the rural population. After five years of controlling inflation, the government has woken up to slower income growth and, for now, has resorted to cash transfers and loan transfers.

Slower income growth has seen consumers cutting back on items of daily consumption from soaps and toothpastes to hair oil and detergents. Consumer product companies have struggled to maintain growth rates and have resorted to pushing lower priced packs (that bring in lower margins) as well as deepening their distribution reach. They’re fighting with local and regional brands for every inch of market share.

It’s not all gloom and doom. The government has put in place a massive rural housing programme through the Pradhan Mantri Awaas Yojana–Gramin. Along with a gas cylinder, toilet and wages for labour incurred in constructing the house, the scheme aims to build 29.5 million houses by 2022. In South India, Selco Foundation is working on providing electricity for people to operate small enterprises—a ‘Xerox’ shop, flour mills and a health centre. And Avanti Finance is helping construct a lending platform that other microfinance companies can plug into while Kaleidofin helps in inculcating a saving habit.

(This story appears in the 27 September, 2019 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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