For a change, Bharat outdo India

NEW DELHI: For those who feared that the gusting winds of economic growth would go past rural India, here''s a sunny statistic. Incomes in rural India are growing faster than in urban areas, says the National Council of Applied Economic Research (NCAER).
While urban incomes are growing at 3.2% per annum, rural incomes are rising by 4.5% a year. In 1994-95, three years after the country started economic reforms, the average rural income was 55-58% of the average urban income.By 2001-02, it was up to 63-64% and in 2004-05 estimates are that the figure would touch 66%, or roughly two-thirds of urban income.
With pockets getting heavier, the middle class in villages is expanding. "The rural middle class is growing at 12%, while in urban areas it is increasing at 13%," says R K Shukla, principal statistician at NCAER. By middle class, he means a household earning between Rs 2 to Rs 10 lakh per annum.
In 2001-02, 35% of India''s 60-million middle class lived in the villages. By 2009-10, India is likely to have a middle class population of 154 million, one-third of which will be from villages.
And villages will have their fair share of the...
...creamy layer too, NCAER estimates suggest. The numbers of those with a household income of over Rs 10 lakh per annum are projected to increase from 4 million in 2001-02 to 21 million by the end of this decade, with rural India accounting for 22-23% of this population.
On the flip side, the ranks of the "deprived" are not coming down fast enough in rural areas and that trend is not expected to change in a hurry. "Even as the number of deprived persons (with an annual family income of less than Rs 90,000) is declining, it is not as fast or in the same ratio as in urban areas," says Shukla.
The decline in the number of "deprived" persons is 1.7% per annum in rural areas as compared to 4% per year in urban areas. NCAER has projected that in 2009-10, there will be 600 million "deprived" persons. In 2001-02, there were 730 million. In this, the percentage of rural "deprived" will actually go up from 82% in 2001-02 to 84% in 2009-10.
This large chunk of village population that still lacks purchasing power could be acting as a roadblock in the much-expected rural market boom.
"The per capita disposable income is still low as a large number of rural folks are daily wage earners. Poor roads, power problems make white goods and consumer durable inaccessible to even those who can afford them," says Shukla.
A chhotta fizz drink, small shampoo and detergent sachets and the good old red soap now in a variation of green are evidence that the rural market is yet to make big size gains.