A silent revolution

The Indian growth story is now spreading itself to India's hinterlands. With rising incomes, both consumption and production have increased significantly. Food grain production was in excess of 227.3 million tonnes in 2007–08 which was an increase of an increase of 4.6 per cent over the previous year. In 2008, the rural market has grown at an impressive rate of 25 per cent compared to the 7–10 per cent growth rate of the urban consumer retail market.

The development of rural infrastructure is an important priority for the government. The Punjab government has launched a mobile information service for the farmers for information about 17 crops and commodities. The Himachal government is trying to boost tourism in the state by promoting the rural experience theme by launching the "Himachal Pradesh Home Stay Scheme 2008", wherein, tourists would be offered comfortable home stay accommodation in the rural areas of Himachal.

According to a McKinsey survey conducted in 2007, rural India, with a population of 627 million, (approximately 74.3 per cent of the total population), would become bigger than the total consumer market in countries such as South Korea or Canada in another twenty years. And it would grow almost four times from its existing size in 2007, which was estimated at US$ 577 billion. As per the cellphone-user statistics provided by the Cellular Operators Association of India (COAI), the B and C areas in India are outrunning major cities in terms of subscriber additions.

Therefore, after several global corporations like Microsoft, Intel, and Shell, many other major multinational companies (MNCs) and domestic players are keen to foray into the rural Indian market to capitalise on its growing opportunities.

• For its growth in the future, the ICICI Bank will be focussing on the rural market and the agriculture sector which accounts for about 18 percent to the Gross Domestic Product (GDP) of the country.
• The US$ 17 billion GE Healthcare has plans for investing US$ 200 million in Indian rural market for equipments for diagnostics and disease monitoring, across 12 states over three years.
• Apollo Hospitals, a top healthcare group, plans to set up 250 speciality hospitals, (Apollo Reach Hospitals), over the next seven years, across rural and semi-urban areas, with an investment of US$ 2.27 billion. It expects revenues of US$ 9.09 million from each hospital in the coming three years.
• In a major initiative to push the use of solar water heaters in rural areas, US-based Suncast Energy Corp will soon be launching light weight solar (LSW) heaters in the country, mainly in the 125,000 villages without any power connection. In September 2008, the rural solar heating market was estimated at more than US$ 5 billion.

In fact, Indian villages are now also benefitting from the IT revolution in India. E-Panchayats and 'E-medicine' are slowly taking over rural India. A study by internet research firm JuxtConsult revealed that one out of every seven regular internet users is from the rural belt. Moreover, back-end process outsourcing (BPOs) companies are slowly growing roots in rural areas.

IBM is running a pilot project in south India for provide information through a toll-free phone number. SREI Sahaj e-Village Ltd will set up 25,000 IT kiosks to be known as common service centres (CSC) across West Bengal, Bihar, Orissa, Assam, Uttar Pradesh and Tamil Nadu, by 2010.