Rural India is roaring!

If you dissect the quarterly/yearly results of Hero Honda; which were published last week; one this is very clear, it seems recession has not impacted Hero Honda and there is a growth reported by them. More importantly, they have achieved this through growth in rural India.

Less affected by recession, the rural economy is spending much of the higher income derived from a good winter crop of grains and pulses, high minimum support price from Government and the relief from the government waiver of farm loans.

The general election (business standard has predicted that 2009 General election would contribute 0.3% to GDP), summer holiday season, marriages and even the effect of sixth pay commission hikes; all are aiding a massive jump in sales.

The strength of rural economy is getting reflected in Fast moving consumer goods (FMCG), cement and telecom; in addition to two wheelers and tractors.

All of a sudden; rural consumer is of great importance for India Inc now. The marketing teams are busy in defining the strategy to attract rural attention. Interesting enough; rural market is untapped in many areas and there is lot of room for the business for all. Due to media network, even rural market is aware of the new trends and products. And unlike his urban counterpart; rural consumer is ready to spend and he need not to bother about his job loss and EMI to pay every month.

Unfortunately, our business (IT and ITES) doesn’t have an exposure to rural India!