Rural Indians beat city dwellers in consumption

 Consumption in rural India is growing faster than in urban India, according to CRISIL Research.

Given the large size of the country’s rural population, the value of goods and services consumed by them has always been greater in rural India, but urban India had narrowed the differential during most of the last decade by growing at a faster pace, it noted.

Between 2009-10 and 2011-12, additional spending by rural India was Rs 3,750 billion, significantly higher than Rs 2,994 billion by urbanites. “Underpinning this growth in rural consumption is a strong increase in rural incomes due to rising non-farm employment opportunities and the government’s rural focus through employment generation schemes,” said Managing Director & CEO Roopa Kudva.

About one in every two rural households now has a mobile phone. Even in India’s poorest states such as Bihar and Orissa, one in three rural households has a mobile phone.

Nearly 42 per cent of rural households owned a television in 2009-10, up from 26 per cent five years earlier. For India, rising income and low penetration of many consumer durables means rural consumption has the potential to be a key source of demand.

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