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Consumer Awareness in Rural India - An Empirical Study
Project Directors
Prof. Suresh Misra Ms. Sapna Chadah
Project Associates
Dr. Amit Kumar Singh Virendra Nath Mishra
Sponsored by
Department of Consumer Affairs, Ministry of Consumer Affairs,
Food & Public Distribution
Government of India, New Delhi
Conducted by
Centre for Consumer Studies Indian Institute of Public
Administration Indraprastha Estate, New Delhi-110002
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i
PrefacePrefacePrefacePreface
The welfare of the consumers lies in the fulfilment of theThe
welfare of the consumers lies in the fulfilment of theThe welfare
of the consumers lies in the fulfilment of theThe welfare of the
consumers lies in the fulfilment of their normal and legitimate ir
normal and legitimate ir normal and legitimate ir normal and
legitimate
expectation with regards to the goods they purchases and the
services they avail. In a expectation with regards to the goods
they purchases and the services they avail. In a expectation with
regards to the goods they purchases and the services they avail. In
a expectation with regards to the goods they purchases and the
services they avail. In a
country like India where all the consumer protection laws are in
place, the consumers are country like India where all the consumer
protection laws are in place, the consumers are country like India
where all the consumer protection laws are in place, the consumers
are country like India where all the consumer protection laws are
in place, the consumers are
not really aware of them and the mechanism in place tonot really
aware of them and the mechanism in place tonot really aware of them
and the mechanism in place tonot really aware of them and the
mechanism in place to redress their grievances. Those redress their
grievances. Those redress their grievances. Those redress their
grievances. Those
who know the laws know that the process is very slow and
cumbersome. There are a who know the laws know that the process is
very slow and cumbersome. There are a who know the laws know that
the process is very slow and cumbersome. There are a who know the
laws know that the process is very slow and cumbersome. There are
a
number of steps taken to protect the rural consumer but without
much impact due to the number of steps taken to protect the rural
consumer but without much impact due to the number of steps taken
to protect the rural consumer but without much impact due to the
number of steps taken to protect the rural consumer but without
much impact due to the
prevailing socio prevailing socio prevailing socio prevailing
socio ---- economic conditions of the rural con economic conditions
of the rural con economic conditions of the rural con economic
conditions of the rural consumers. They generally base their
sumers. They generally base their sumers. They generally base their
sumers. They generally base their
purchasing decisions on the advertisement campaigns and
promotional strategies purchasing decisions on the advertisement
campaigns and promotional strategies purchasing decisions on the
advertisement campaigns and promotional strategies purchasing
decisions on the advertisement campaigns and promotional
strategies
employed by the organizations and also lack choiceemployed by
the organizations and also lack choiceemployed by the organizations
and also lack choiceemployed by the organizations and also lack
choice....
TTTThe he he he rural markets, which were earlier ignored by
most of the big international rural markets, which were earlier
ignored by most of the big international rural markets, which were
earlier ignored by most of the big international rural markets,
which were earlier ignored by most of the big international
market playmarket playmarket playmarket players, are now being
seen as a land of great business opportunity. As the ers, are now
being seen as a land of great business opportunity. As the ers, are
now being seen as a land of great business opportunity. As the ers,
are now being seen as a land of great business opportunity. As
the
disposable income of the masses is growing, more and more
corporate houses are entering disposable income of the masses is
growing, more and more corporate houses are entering disposable
income of the masses is growing, more and more corporate houses are
entering disposable income of the masses is growing, more and more
corporate houses are entering
into the rural markets with their new goods and products. Due to
this marketing for rural into the rural markets with their new
goods and products. Due to this marketing for rural into the rural
markets with their new goods and products. Due to this marketing
for rural into the rural markets with their new goods and products.
Due to this marketing for rural
consuconsuconsuconsumers is becoming more complex. In a country
like India, where a substantial mers is becoming more complex. In a
country like India, where a substantial mers is becoming more
complex. In a country like India, where a substantial mers is
becoming more complex. In a country like India, where a
substantial
number of the rural people are living below the poverty line,
having high level of number of the rural people are living below
the poverty line, having high level of number of the rural people
are living below the poverty line, having high level of number of
the rural people are living below the poverty line, having high
level of
unemployment and poor literacy level; consumer awareness
continues to remain low. unemployment and poor literacy level;
consumer awareness continues to remain low. unemployment and poor
literacy level; consumer awareness continues to remain low.
unemployment and poor literacy level; consumer awareness continues
to remain low.
Several studiSeveral studiSeveral studiSeveral studies have
shown that rurales have shown that rurales have shown that rurales
have shown that rural consumers are generally ignorant and also
consumers are generally ignorant and also consumers are generally
ignorant and also consumers are generally ignorant and also
unorganised. Under these circumstances, the sellers or the
manufacturers, exploit the unorganised. Under these circumstances,
the sellers or the manufacturers, exploit the unorganised. Under
these circumstances, the sellers or the manufacturers, exploit the
unorganised. Under these circumstances, the sellers or the
manufacturers, exploit the
consumers. consumers. consumers. consumers.
Though, the consumers in India have been provided with various
safety measures Though, the consumers in India have been provided
with various safety measures Though, the consumers in India have
been provided with various safety measures Though, the consumers in
India have been provided with various safety measures
against theagainst theagainst theagainst their exploitation,
still the sellers and producers are hoarding and blackir
exploitation, still the sellers and producers are hoarding and
blackir exploitation, still the sellers and producers are hoarding
and blackir exploitation, still the sellers and producers are
hoarding and black----
marketing the essential goods, resorting economic corruption and
frequently cheating marketing the essential goods, resorting
economic corruption and frequently cheating marketing the essential
goods, resorting economic corruption and frequently cheating
marketing the essential goods, resorting economic corruption and
frequently cheating
the consumers. Rural markets are full of subthe consumers. Rural
markets are full of subthe consumers. Rural markets are full of
subthe consumers. Rural markets are full of sub----standard goods
and duplicity of branded standard goods and duplicity of branded
standard goods and duplicity of branded standard goods and
duplicity of branded
goods is anothgoods is anothgoods is anothgoods is another major
problem in rural areas. As there is no check on production and sale
er major problem in rural areas. As there is no check on production
and sale er major problem in rural areas. As there is no check on
production and sale er major problem in rural areas. As there is no
check on production and sale
of such products in the rural markets, many of these products
have become health of such products in the rural markets, many of
these products have become health of such products in the rural
markets, many of these products have become health of such products
in the rural markets, many of these products have become health
hazards. The expansion of service sector has added to the
problem. Services like insurance, hazards. The expansion of service
sector has added to the problem. Services like insurance, hazards.
The expansion of service sector has added to the problem. Services
like insurance, hazards. The expansion of service sector has added
to the problem. Services like insurance,
bankinbankinbankinbanking, electricity, medical have expanded in
the rural areas without any checks and g, electricity, medical have
expanded in the rural areas without any checks and g, electricity,
medical have expanded in the rural areas without any checks and g,
electricity, medical have expanded in the rural areas without any
checks and
balances and the rural consumers continue to be exploited by the
service providers. balances and the rural consumers continue to be
exploited by the service providers. balances and the rural
consumers continue to be exploited by the service providers.
balances and the rural consumers continue to be exploited by the
service providers.
Deficiency in services is a major area of concern. Spurious
drugs are causing major Deficiency in services is a major area of
concern. Spurious drugs are causing major Deficiency in services is
a major area of concern. Spurious drugs are causing major
Deficiency in services is a major area of concern. Spurious drugs
are causing major
health hhealth hhealth hhealth hazards. The vulnerable sections
are mainly women, children and farmers. It is azards. The
vulnerable sections are mainly women, children and farmers. It is
azards. The vulnerable sections are mainly women, children and
farmers. It is azards. The vulnerable sections are mainly women,
children and farmers. It is
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ii
common to find that farmers are supplied defective seeds,
adulterated pesticides and other common to find that farmers are
supplied defective seeds, adulterated pesticides and other common
to find that farmers are supplied defective seeds, adulterated
pesticides and other common to find that farmers are supplied
defective seeds, adulterated pesticides and other
sub standard commodities. In the rural markets and hats spurious
goods are very sub standard commodities. In the rural markets and
hats spurious goods are very sub standard commodities. In the rural
markets and hats spurious goods are very sub standard commodities.
In the rural markets and hats spurious goods are very
common.common.common.common. The expansion of mass media has
further given impetus to consumerism in the The expansion of mass
media has further given impetus to consumerism in the The expansion
of mass media has further given impetus to consumerism in the The
expansion of mass media has further given impetus to consumerism in
the
rural areas. rural areas. rural areas. rural areas. Therefore,
now it is widely believed that the fate of the consumers cannot be
Therefore, now it is widely believed that the fate of the consumers
cannot be Therefore, now it is widely believed that the fate of the
consumers cannot be Therefore, now it is widely believed that the
fate of the consumers cannot be
left to the market forces. In view of this the Government of
India has taken a number ofleft to the market forces. In view of
this the Government of India has taken a number ofleft to the
market forces. In view of this the Government of India has taken a
number ofleft to the market forces. In view of this the Government
of India has taken a number of
legal measures to protect the consumers by enlarging the scope
of consumer protection. Of legal measures to protect the consumers
by enlarging the scope of consumer protection. Of legal measures to
protect the consumers by enlarging the scope of consumer
protection. Of legal measures to protect the consumers by enlarging
the scope of consumer protection. Of
the various legal remedies,the various legal remedies,the
various legal remedies,the various legal remedies, the Consumer
Protection Act, enacted on 24 the Consumer Protection Act, enacted
on 24 the Consumer Protection Act, enacted on 24 the Consumer
Protection Act, enacted on 24thththth December 1986 is December
1986 is December 1986 is December 1986 is
the principal legal remedy available to the consumers. This is
an importantthe principal legal remedy available to the consumers.
This is an importantthe principal legal remedy available to the
consumers. This is an importantthe principal legal remedy available
to the consumers. This is an important Act which Act which Act
which Act which
seeks to provide better protection of the interests of the
consumers.seeks to provide better protection of the interests of
the consumers.seeks to provide better protection of the interests
of the consumers.seeks to provide better protection of the
interests of the consumers.
According to experts, the four factors which influence demand in
rural India areAccording to experts, the four factors which
influence demand in rural India areAccording to experts, the four
factors which influence demand in rural India areAccording to
experts, the four factors which influence demand in rural India
are----
access, attitude, awareness and affluence. Some companies have
successfully used this to access, attitude, awareness and
affluence. Some companies have successfully used this to access,
attitude, awareness and affluence. Some companies have successfully
used this to access, attitude, awareness and affluence. Some
companies have successfully used this to
infinfinfinfluence the rural market for its shampoos in sachets.
The sachet strategy has proved so luence the rural market for its
shampoos in sachets. The sachet strategy has proved so luence the
rural market for its shampoos in sachets. The sachet strategy has
proved so luence the rural market for its shampoos in sachets. The
sachet strategy has proved so
successful that, according to an ORG successful that, according
to an ORG successful that, according to an ORG successful that,
according to an ORG ---- MARG data, 95 percent of total shampoo
sale in MARG data, 95 percent of total shampoo sale in MARG data,
95 percent of total shampoo sale in MARG data, 95 percent of total
shampoo sale in
rural India is by sachets. The company had developed a direct
access to markets thrrural India is by sachets. The company had
developed a direct access to markets thrrural India is by sachets.
The company had developed a direct access to markets thrrural India
is by sachets. The company had developed a direct access to markets
through ough ough ough
wholesale channel and created awareness through media,
demonstration and on ground wholesale channel and created awareness
through media, demonstration and on ground wholesale channel and
created awareness through media, demonstration and on ground
wholesale channel and created awareness through media,
demonstration and on ground
contact. This changed the attitude of the villagers. Today, the
young and the educated in contact. This changed the attitude of the
villagers. Today, the young and the educated in contact. This
changed the attitude of the villagers. Today, the young and the
educated in contact. This changed the attitude of the villagers.
Today, the young and the educated in
the villages are already large in number and this number is
increasing. Alreadthe villages are already large in number and this
number is increasing. Alreadthe villages are already large in
number and this number is increasing. Alreadthe villages are
already large in number and this number is increasing. Already, 40
y, 40 y, 40 y, 40
percent of all those graduating from colleges are rural youth.
They are the decision percent of all those graduating from colleges
are rural youth. They are the decision percent of all those
graduating from colleges are rural youth. They are the decision
percent of all those graduating from colleges are rural youth. They
are the decision
makers and are not very different in education, exposure,
attitudes and aspirations from makers and are not very different in
education, exposure, attitudes and aspirations from makers and are
not very different in education, exposure, attitudes and
aspirations from makers and are not very different in education,
exposure, attitudes and aspirations from
their counterparts at least in smaller cities and towns.their
counterparts at least in smaller cities and towns.their
counterparts at least in smaller cities and towns.their
counterparts at least in smaller cities and towns.
Consumers are explConsumers are explConsumers are explConsumers
are exploited when they are cheated in any form or when not
informed oited when they are cheated in any form or when not
informed oited when they are cheated in any form or when not
informed oited when they are cheated in any form or when not
informed
adequately about the product. Consumer exploitation is in many
ways. They may be adequately about the product. Consumer
exploitation is in many ways. They may be adequately about the
product. Consumer exploitation is in many ways. They may be
adequately about the product. Consumer exploitation is in many
ways. They may be
exploited by giving incomplete or wrong information. They may be
exploited by sellers exploited by giving incomplete or wrong
information. They may be exploited by sellers exploited by giving
incomplete or wrong information. They may be exploited by sellers
exploited by giving incomplete or wrong information. They may be
exploited by sellers
who may weigh less or measurwho may weigh less or measurwho may
weigh less or measurwho may weigh less or measure wrongly.
Sometimes, a consumer may be given low e wrongly. Sometimes, a
consumer may be given low e wrongly. Sometimes, a consumer may be
given low e wrongly. Sometimes, a consumer may be given low
quality of goods. One of the very common and a serious problem
by which a consumer quality of goods. One of the very common and a
serious problem by which a consumer quality of goods. One of the
very common and a serious problem by which a consumer quality of
goods. One of the very common and a serious problem by which a
consumer
may be exploited and cheated by the shopmay be exploited and
cheated by the shopmay be exploited and cheated by the shopmay be
exploited and cheated by the shop----keeper is by providing impure
or adulterated keeper is by providing impure or adulterated keeper
is by providing impure or adulterated keeper is by providing impure
or adulterated
goods with harmful substances. Food agoods with harmful
substances. Food agoods with harmful substances. Food agoods with
harmful substances. Food adulteration is a serious problem in the
rural dulteration is a serious problem in the rural dulteration is
a serious problem in the rural dulteration is a serious problem in
the rural
markets where the administrative machinery is not able to tackle
this menace. As far as markets where the administrative machinery
is not able to tackle this menace. As far as markets where the
administrative machinery is not able to tackle this menace. As far
as markets where the administrative machinery is not able to tackle
this menace. As far as
the service sector is concerned a large number of complaints
regarding medical services, the service sector is concerned a large
number of complaints regarding medical services, the service sector
is concerned a large number of complaints regarding medical
services, the service sector is concerned a large number of
complaints regarding medical services,
banking, insurance and electricitbanking, insurance and
electricitbanking, insurance and electricitbanking, insurance and
electricity go unreported as the consumer is unaware of the y go
unreported as the consumer is unaware of the y go unreported as the
consumer is unaware of the y go unreported as the consumer is
unaware of the
redressal mechanism. Cases of medical negligence are common in
the rural areas but redressal mechanism. Cases of medical
negligence are common in the rural areas but redressal mechanism.
Cases of medical negligence are common in the rural areas but
redressal mechanism. Cases of medical negligence are common in the
rural areas but
then the consumer has no choice.then the consumer has no
choice.then the consumer has no choice.then the consumer has no
choice.
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iii
The present study has been conducted in five states of India
namely Uttarakhand The present study has been conducted in five
states of India namely Uttarakhand The present study has been
conducted in five states of India namely Uttarakhand The present
study has been conducted in five states of India namely
Uttarakhand
from Nortfrom Nortfrom Nortfrom North, Maghalaya from East,
Gujarat from West, Tamilnadu from South and h, Maghalaya from East,
Gujarat from West, Tamilnadu from South and h, Maghalaya from East,
Gujarat from West, Tamilnadu from South and h, Maghalaya from East,
Gujarat from West, Tamilnadu from South and
Madhya Pradesh from Central India. The study attempts to
evaluate the changing Madhya Pradesh from Central India. The study
attempts to evaluate the changing Madhya Pradesh from Central
India. The study attempts to evaluate the changing Madhya Pradesh
from Central India. The study attempts to evaluate the changing
profile of the rural consumers in India, assess the level of
awareness, of rural consumers profile of the rural consumers in
India, assess the level of awareness, of rural consumers profile of
the rural consumers in India, assess the level of awareness, of
rural consumers profile of the rural consumers in India, assess the
level of awareness, of rural consumers
on various consumon various consumon various consumon various
consumer protection measures initiated by the Government of India
and other er protection measures initiated by the Government of
India and other er protection measures initiated by the Government
of India and other er protection measures initiated by the
Government of India and other
agencies, assess the rural consumers current knowledge,
attitudes, behaviour and agencies, assess the rural consumers
current knowledge, attitudes, behaviour and agencies, assess the
rural consumers current knowledge, attitudes, behaviour and
agencies, assess the rural consumers current knowledge, attitudes,
behaviour and
practices while purchasing goods or availing services, examine
the nature of unfair trade practices while purchasing goods or
availing services, examine the nature of unfair trade practices
while purchasing goods or availing services, examine the nature of
unfair trade practices while purchasing goods or availing services,
examine the nature of unfair trade
practices in tpractices in tpractices in tpractices in the rural
areas, assess the level of satisfaction of the rural consumers on
he rural areas, assess the level of satisfaction of the rural
consumers on he rural areas, assess the level of satisfaction of
the rural consumers on he rural areas, assess the level of
satisfaction of the rural consumers on
various products and services available in the rural areas and
to draw conclusions from various products and services available in
the rural areas and to draw conclusions from various products and
services available in the rural areas and to draw conclusions from
various products and services available in the rural areas and to
draw conclusions from
the study and suggest remedial measures for better protection of
the rural consumers.the study and suggest remedial measures for
better protection of the rural consumers.the study and suggest
remedial measures for better protection of the rural consumers.the
study and suggest remedial measures for better protection of the
rural consumers.
We wouWe wouWe wouWe would like to acknowledge the support
extended by the Department of ld like to acknowledge the support
extended by the Department of ld like to acknowledge the support
extended by the Department of ld like to acknowledge the support
extended by the Department of
Consumer Affairs, GoI in conducting this study. We are
particularly thankful to Shri. Consumer Affairs, GoI in conducting
this study. We are particularly thankful to Shri. Consumer Affairs,
GoI in conducting this study. We are particularly thankful to Shri.
Consumer Affairs, GoI in conducting this study. We are particularly
thankful to Shri.
Rajiv Agarwal, Secretary, Shri Rakesh Kakkar, Additional
Secretary and Shri G.N Rajiv Agarwal, Secretary, Shri Rakesh
Kakkar, Additional Secretary and Shri G.N Rajiv Agarwal, Secretary,
Shri Rakesh Kakkar, Additional Secretary and Shri G.N Rajiv
Agarwal, Secretary, Shri Rakesh Kakkar, Additional Secretary and
Shri G.N
Shreekumaran, Joint SecreShreekumaran, Joint SecreShreekumaran,
Joint SecreShreekumaran, Joint Secretary, Department of Consumer
Affairs, GoI for their help. We tary, Department of Consumer
Affairs, GoI for their help. We tary, Department of Consumer
Affairs, GoI for their help. We tary, Department of Consumer
Affairs, GoI for their help. We
would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for
his encouragement and would also thank Dr. Rakesh Hooja, Director
IIPA, New Delhi for his encouragement and would also thank Dr.
Rakesh Hooja, Director IIPA, New Delhi for his encouragement and
would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for his
encouragement and
guidance. Our thanks are due to our colleagues in the Centre for
Consumer Studies guidance. Our thanks are due to our colleagues in
the Centre for Consumer Studies guidance. Our thanks are due to our
colleagues in the Centre for Consumer Studies guidance. Our thanks
are due to our colleagues in the Centre for Consumer Studies
particularly Amit, Virendraparticularly Amit,
Virendraparticularly Amit, Virendraparticularly Amit, Virendra and
Pankaj for not only providing valuable inputs and and Pankaj for
not only providing valuable inputs and and Pankaj for not only
providing valuable inputs and and Pankaj for not only providing
valuable inputs and
rendering support in completing the study but also in taking up
most of the field work.. rendering support in completing the study
but also in taking up most of the field work.. rendering support in
completing the study but also in taking up most of the field work..
rendering support in completing the study but also in taking up
most of the field work..
We also acknowledge the use of data from various sources for
which appropriate references We also acknowledge the use of data
from various sources for which appropriate references We also
acknowledge the use of data from various sources for which
appropriate references We also acknowledge the use of data from
various sources for which appropriate references
are given.are given.are given.are given.
We are conWe are conWe are conWe are confident that this report
will be useful to various stakeholders and policy fident that this
report will be useful to various stakeholders and policy fident
that this report will be useful to various stakeholders and policy
fident that this report will be useful to various stakeholders and
policy
makers to reorient policies and programmes for better protection
of the rural consumers. makers to reorient policies and programmes
for better protection of the rural consumers. makers to reorient
policies and programmes for better protection of the rural
consumers. makers to reorient policies and programmes for better
protection of the rural consumers.
Unless the consumer movement reaches the village, the consumers
will continue to be Unless the consumer movement reaches the
village, the consumers will continue to be Unless the consumer
movement reaches the village, the consumers will continue to be
Unless the consumer movement reaches the village, the consumers
will continue to be
exploitedexploitedexploitedexploited....
Suresh MisraSuresh MisraSuresh MisraSuresh Misra Sapna
ChadahSapna ChadahSapna ChadahSapna Chadah
20.9.200920.9.200920.9.200920.9.2009 New DelhiNew DelhiNew
DelhiNew Delhi
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iv
Contents
Page No.
Preface i-iii
1. Chapter I Introduction 1-14
2. Chapter II Profile of Rural Consumers 15-42
3. Chapter III Level of Awareness among Rural Consumers
43-84
4. Chapter IV Findings & Recommendations 85-91
5. Annexure 92-94
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1
CHAPTER I
INTRODUCTION
Globalisation, liberalisation and privatisation have transformed
the Indian
economy into a vibrant, rapidly growing consumer market. As a
result the markets
are flooded with different kinds of goods and services,
substantially effecting and
changing the purchasing pattern of the consumers. The rural
markets, which were
earlier ignored by most of the big international market players,
are now being seen
as a land of great business opportunity. As the disposable
income of the masses
is growing, more and more corporate houses are entering into the
rural markets
with their new goods and products. Due to this marketing for
rural consumers is
becoming more complex.
In a country like India, where a substantial number of the rural
people are
living below the poverty line, having high level of unemployment
and poor literacy
level; consumer awareness continues to remain low. Several
studies have shown
that rural consumers are generally ignorant and also
unorganised. Under these
circumstances, the sellers or the manufacturers, exploit the
consumers. Though,
the consumers in India have been provided with various safety
measures against
their exploitation, still the sellers and producers are hoarding
and black-marketing
the essential goods, resorting economic corruption and
frequently cheating the
consumers. Rural markets are full of sub-standard goods and
duplicity of branded
goods is another major problem in rural areas. As there is no
check on production
and sale of such products in the rural markets, many of these
products have
become health hazards. The expansion of service sector has added
to the
problem. Services like insurance, banking, electricity, medical
have expanded in
the rural areas without any checks and balances and the rural
consumers continue
to be exploited by the service providers. Deficiency in services
is a major area of
concern. Spurious drugs are causing major health hazards. The
vulnerable
sections are mainly women, children and farmers. It is common to
find that farmers
are supplied defective seeds, adulterated pesticides and other
commodities. In the
rural markets and hats spurious goods are very common. The
expansion of mass
-
2
media has further given impetus to consumerism in the rural
areas. Therefore, now
it is widely believed that the fate of the consumers cannot be
left to the market
forces. In view of this the Government of India has taken a
number of legal
measures to protect the consumers by enlarging the scope of
consumer protection.
Of the various legal remedies, the Consumer Protection Act,
enacted on 24th
December 1986 is the principal legal remedy available to the
consumers. This is
an important Act which seeks to provide better protection of the
interests of the
consumers.
In the present situation, consumer protection, though as old as
consumer
exploitation, has assumed greater importance and relevance. Now
there are laws
and policies which focus on consumer protection and welfare.
Special emphasis is
being given to consumer education so that people become aware
about their rights
and responsibilities as consumers and how to redress their
grievances. In India
various Acts intended to protect the consumers directly or
indirectly against
different forms of exploitation were enacted from time to time.
However, except for
the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969,
all the other
Acts were mainly punitive and preventive in nature. Inspite of
these Acts the
consumers did not have any effective mechanism or institutional
arrangements for
the speedy redressal of their grievances and also the lack of
effective popular
movement isolated the consumer and his plight only increased.
Seeing the
pressure mounting from various consumer protection groups and
the consumers
themselves the Parliament enacted the Consumer Protection Act in
1986.
Consumer Awareness in India
The Consumer Protection Act enacted on 24th December, 1986 is
a
benevolent, unique and highly progressive piece of social
welfare legislation
providing for simple, speedy and less expensive remedy for the
redressal of
consumer grievances in relation to defective goods and deficient
services.
Consumer Protection Act is a weapon in the hands of consumers to
fight against
exploitation by traders, manufacturers and sellers on one hand
and providers of
services on the other. The Act provides effective, people
oriented, broad based
and efficient remedy to consumers against unfair dealings and
exploitation. It was
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3
enacted with an objective to provide better protection of the
interests of the
consumers and to make provision for the establishment of
Consumer Councils and
other authorities for the settlement of consumer disputes.
Unlike other laws, which
are basically punitive or preventive in nature the provisions of
the Act are
compensatory. It is a matter of great satisfaction that we can
legitimately boast that
we now have in our country a statute, which provides more
effective protection to
the consumers than any corresponding legislation in force in
countries, which are
considered to be much more advanced and industrialised.
The Act contemplates establishment of adjudicatory and
advisory
structures in the form of consumer fora and council structure
respectively for the
protection of consumers rights. It extends to the whole of India
except the State of
Jammu and Kashmir which has its own Consumer Protection Act. The
Act applies
to all goods and services unless any good or service is
expressly excluded by the
Central Government by notification. The Act extends to all
sectors -public, private
or cooperative. The Consumer Protection Act is an alternative
and additional
remedy to the remedies already available to the aggrieved
persons/consumers by
way of civil suit.
To provide cheap, speedy and simple redressal to consumer
disputes, three
tier quasi-judicial machinery is set up at each District, State
and National levels
called District Forums, State Consumer Disputes Redressal
Commission and
National Consumer Disputes Redressal Commission respectively. At
present,
there are 662 District Forums, 35 State Commissions with apex
body as a National
Consumer Disputes Redressal Commission (NCDRC). These
quasi-judicial bodies
are required to follow summary procedure and Principles of
Natural Justice to
provide quick and speedy justice to the consumers.
After the enactment of the Consumer Protection Act, 1986, the
first
independent evaluation study of the implementation of this Act
was done through a
study conducted by IIPA in 1994. It was found that large
majority of the consumers
belonging to various categories and income groups were
completely ignorant of
the existence of the CPA and the redressal agencies created
under it. Eleven
-
4
years later, according to a survey commissioned through ORG
Centre for Social
Research by the C&AG, the position had improved only
marginally. The survey
was conducted in July-August, 2005 in 25 States/ UTs covering
48,732
consumers, 6237 complaints, 249 manufacturers / service
providers, 39 NGOs and
34 laboratories. The report of ORG-MARG revealed that: 1
Sixty-six percent of the consumers interviewed were not aware of
consumer rights and 82 percent were even unaware of the Act.
Nearly 49 percent of the aware consumers had come to know about
the Act only in the last 4 years though the Act had been in
existence for the past 18 years.
Overall, only 13 percent of the consumers reported to have been
aware of the existence of any redressal agency.
A majority of the complainants came to know about the redressal
agencies through electronic media (48 percent), print media (61
percent) and friends/relatives (68 percent,), NGOs were not a
popular source of awareness as only 4.9 percentage of the
complainants attributed their awareness to the work of NGOs.
The consumers were not aware of the features of the simple and
inexpensive system of lodging complaint in the absence of any
focused awareness programme launched by the Ministry or the States
in this regard. The beneficiary survey carried out by ORG MARG
revealed that 78 percent of the respondents were carrying a
negative opinion of the efforts made by the government or had no
idea about the same and were not aware that they could directly
represent themselves in the Consumer Forums. It is pertinent to
note that lack of awareness in this regard had deprived the
consumers of the benefit of the adjudication mechanism as out of
the total expenditure of ` 3387 incurred by the consumers on each
case in the Consumer Forum on an average, as much as ` 2787 (82
percent) was the expenditure on advocates.
Therefore, one of the major hindrances in the consumer movement
in the
country is the lack of awareness among the consumers. The
consumers apart from
being unorganized do not have the mechanism to understand their
rights and
responsibilities. These studies reveal not only lack of
awareness but lack of
consumer education as well. A lot more needs to be done on this
front. The right to
consumer education has been recogonised under the Consumer
Protection Act,
1 CAG, Performance Audit of the Implementation of the Consumer
Protection Act and Rules-Report
of the Comptroller and Auditor General of India for the year
ended March 2005, Union Government (Civil), Performance Audit,
2006, p. 9
-
5
1986. However, unless awareness increases realizing the rights
to the consumers,
consumer education remains a distant dream.
Need for Consumer Education
The need for consumer education has increased over time as today
the
consumers operate in an increasingly complex marketplace and are
faced with
increasing amounts of information and an expanding choice of
complex products
and services. As a consequence they are more exposed to fraud
and require a
wider range of skills and knowledge than ever before. Consumer
education is a
potent tool for empowering consumers as it equips consumers with
information and
skills necessary to meet challenges posed by the markets.
Through education,
consumers obtain information about the products and the services
and empower
them and makes them aware of their rights and responsibilities
and helps to
ensure their welfare.
Consumer education improves the position of the consumers in
the
marketplace and helps them make informed choice and thereby
enhance their
welfare. It also contributes to the well functioning of the
markets by promoting
effective competition. It is thus in the common interest of
governments, consumers
and businesses to empower the individual consumer as much as
possible through
awareness of his/her rights, knowledge of how to defend himself
against various
pitfalls and to cope with the subsequent consequences, as well
as the ability to act
proactively in the marketplace. According to Wells and Atherton
consumer
education can be defined as:
a process of gaining skills, knowledge and understanding needed
by individuals in a consumer society such that they can make full
use of consumer opportunities presented in todays complex
marketplace. 2 Most countries consider consumer education as an
important tool for
consumer protection. However, the scope of consumer education
differs
significantly among countries depending on the socio-economic
and cultural
conditions prevailing there. Yet it generally covers one or more
of the following
2 Wells, J and Atherton, M., Consumer Education : Learning for
Life, Consumer 21, Autumn,
1998,pp. 15-20,
-
6
areas: consumer protection, consumer skills to help them make
more informed
decisions and protection of public interest which relates to
environmental and
social issues. Countries have articulated consumer education
objectives in various
ways, such as laws on consumer protection; education on trade;
government
programmes and strategies; and school and college curricula.
High quality
programmes focused on stimulating relevant issues can engage the
interest of
consumers and help equip them with the skills and knowledge to
make better
choices and to resolve problems when things go wrong. Empowered
consumers
are knowledgeable, confident, assertive and self reliant.
Consumer education has
an important role to play in supporting those with less
developed consumer
knowledge and skills. By demanding high standards from business,
consumers
help promote vigorous, competitive, markets. As a tool for
empowerment,
consumer education is therefore important to make markets work
well for
consumers.
Structure of Consumer Education
Available literature indicates that consumer education takes
many forms
and takes place in many different settings, from formal courses
in schools or
universities to informal experience in families, communities and
workplaces. Three
forms of consumer education are being implemented in OECD member
countries
and some non-member economies which are as follows: 3
Formal education refers to learning through a programme of
instruction in
an educational institution, adult training centre or in the
workplace, and is generally
recognized by a qualification or a certificate. All countries
acknowledge that
children and young people are particularly important targets of
consumer education
as theses age groups account for an ever-increasing share of
family consumption.
At the same time they are likely to be particularly vulnerable
to making unwise
decisions and or falling victim to aggressive marketing. The
fact that both parents
often work outside the home has led to a change in the role of
parents in consumer
training. With this in mind, many countries have made consumer
education
3 OECD, Promoting Consumer Education Trends, Policies and Good
Practices, OECD, 2009 pp.
11-31;
-
7
compulsory in primary, secondary and in some countries in
upper-secondary
grades. The objectives include helping pupils to: gain knowledge
of what it means
to act as informed consumers; develop and understand societys
function as a
whole and specific role of consumers; master skills to function
as informed and
responsible consumers; recognize the importance of being an
informed consumer.
The ultimate goal is for consumers to act spontaneously in
informed, educated and
responsible ways. 4
In most countries, consumer education is integrated into the
school
curriculum in an interdisciplinary way. Subjects that may
include consumer
concepts are economics, mathematics, biology, chemistry,
language, arts,
business education and home economics. These subjects cover a
variety of issues
which are important for consumers in contemporary society,
including the effects of
consumption on the environment, production and consumption in a
global
perspective, health and food, product quality and safety, and
financial
management. Relevant issues are thus addressed in
cross-curricular themes such
as home economics, citizenship, civic education or social
studies.
In addition, a variety of non-formal education tools or
activities (i.e. not
included in the curriculum) complement more traditional methods.
These are
websites, videos, exercise books, school magazines as well as
theme days, school
competitions and contests, consumer clubs, national fairs for
teachers and pupils
and special educational programmes. These non-formal teaching
tools are mostly
produced by consumer associations in co-operation with
parent-teacher
associations, and in some countries with other stakeholders.
Consumer education
generally focuses on the primary and secondary school
curriculum. However, in
some countries it also takes place in universities.
Lifelong education- There is wide consensus that learning, which
is of
significance to individuals as well as to communities and
societies, must extend
beyond formal education. Lifelong education covers all
purposeful learning activity
4 Bannister, R. and C. Monsma, Classification of Concepts in
Consumer Education NASSP
Bulletin, 1982
-
8
from the cradle to the grave which aims to improve the knowledge
and
competencies of all individuals who participate in learning
activities. A prerequisite
for lifelong learning is a sound foundation in basic educational
competencies
acquired in formal education and opportunities for further
learning once persons
leave initial education and training. Practically, this includes
education available at
community centres as well as loosely organized education.
Lifelong learning may
take place at the individual level (e.g. self-directed learning)
or at the group level
(e.g. at the workplace or within the family).
One of the fundamental features of lifelong learning is a
systematic and
interconnected approach to the organization of learning rather
than a fragmented
approach in which separate policies are implemented for each
stage of education.
This is appropriate for consumer education, since consumers
knowledge and
information needs to be frequently updated, and the attainment
of informed and
knowledgeable consumption is a cumulative process. The adult
consumers face a
more complex environment than young consumers, the range of
knowledge they
need also becomes broader and more complex as they grow
older.
Targeted education- It refers to a range of educational
activities designed
for particular consumer groups that are considered vulnerable
(e.g. women, the
disabled and the poor) to help protect them against fraudulent
or deceptive
practices in the marketplace or other specific consumerrelated
issues. Specific
groups which are targeted in various countries in their major
initiatives are: young
children, the elderly, women, people with a limiting or
longstanding illness or
handicapped, populations in rural areas, unemployed persons and
tourists.
These three concepts are not mutually exclusive. Lifelong
education is a
broad concept that encompasses both formal and targeted
education. At the same
time, several countries implement formal and/or targeted
education but do not
support the lifelong learning concept. Lifelong and targeted
consumer education
may be non-formal or informal:
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9
Non-formal learning takes place through a programme but is not
usually evaluated and does not lead to certification.
Informal learning is learning from daily work-related, family or
leisure activities.
Framework for Consumer Education
Most countries have a centralized institutional framework for
consumer
education, under which the central government develops consumer
education
policies which reach local areas through local governments or
through regional
networks. In many countries, local governments implement
policies which are
adjusted to the regional environment but they lack discretionary
power. A few
countries operate consumer education policies in a decentralized
way. In this case,
the central government sets the overall policy framework but
major initiatives are
developed and delivered at local levels.
Other market players and stakeholders actively involved in
consumer
education include:
Consumer organizations and other civil groups whose objective is
to promote consumer education.
Industry and trade associations and individual companies.
Universities and educational institutions.
Teachers associations, practitioners, teachers and
instructors.
Family and parents associations.
Media
As the scope of consumer education has broadened and become
more
proactive, more groups have been involved and there has been a
greater focus on
influencing consumption behaviour in more conscious and critical
ways. The
respective roles of the public and private sectors in enhancing
consumer education
vary among jurisdictions, depending in part on their statutory
situation. In general,
the provision of information and advice relating to consumer
protection is mainly
the task of government and consumer organization. Yet the
objective of raising
consumer awareness involves a broader range of stakeholders.
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10
Key Issues and Challenges in Consumer Education
Basically consumer education faces five main challenges: 5
Lacks of overall strategies- Most countries do not have an
overall
consumer education strategy. Even in countries where lifelong
consumer
education has been endorsed, little appears to have been done
to
implement programmes to support such learning.
Need to enhance the quality of education provided- According to
the
country responses, the quality of consumer education could
be
enhanced in terms not only of content, but also of delivery.
Limited opportunities for education in school settings- Because
of
the limited time available in the school curriculum, it is not
easy to find a
place for consumer education. In addition, responses indicate
that the
relevant governmental institutions do not always fully see the
importance
of consumer education and that school teachers hesitate to
include
consumer education in their classes.
Lack of coherence in education initiatives- Although
consumer
education in taught, there is a general lack of cohesiveness
with other
relevant education policies, and it is implemented in a
fragmented way.
Lack of sufficient self-motivation for both the educated and
the
educator- Some responses suggest that it is difficult for policy
- makers
to promote consumer education because both the educators and
the
educated are not very motivated to find and profit from the
relevant
educational opportunities and information.
Limited resources- All of these challenges require additional
resources
but these are limited in many countries.
Need of the Study
Since 1986, consumer education and awareness has attracted the
attention
of the Government of India. The laws can only give certain
rights to the consumers,
but its functioning and implementation largely depends on the
awareness and
5 OECD, Promoting Consumer Education Trends, Policies and Good
Practices, OECD, 2009 pp.
39-40
-
11
efforts of the consumers themselves. The problem is more acute
in the rural areas.
In fact, an educated and aware person is an empowered consumer.
Education
equips a person with the skill to make discerning choices, to
sort out problems
effectively and to seek further information and help
appropriately.
In this backdrop of ongoing efforts of Government of India to
disseminate
the consumer rights to the people and to protect them from the
exploitation of
market forces, the focus of the present research work is to
evaluate the level of
consumers awareness in different parts of rural India. The
reports of National
Commission for Applied Economic Research clearly reveal that the
rural growth
rates have already outpaced urban ones and will continue to do
so through the
next decade. Rural India accounts for more than 50% of the GDP.
Out of 62.97
million households of India those are getting more than 5 lakhs
per annum, nearly
28.68 million households (46%) live in Rural India. The rural
market in India is
projected to be bigger than the urban market for fast moving
consumer goods;
rural consumption expenditure is accounted for around 60 percent
of the country's
total consumption expenditure. Hence, it is imperative to
analyse the social, legal
and other measures taken in rural areas to protect the interest
of consumers, as
more and more companies will try to sell their goods and
products in rural markets.
The rural consumers need to be educated about their rights and
adequate steps
are taken to ensure that they get the value for their money as
consumers.
Objectives of the Study
The main objectives of the study are as follows:
1. To evaluate the changing profile of the rural consumers in
India 2. To study the level of awareness, of rural consumers on
various consumer
protection measures initiated by the Government of India and
other agencies.
3. To evaluate the rural consumers current knowledge, attitudes,
behaviour
and practices while purchasing goods or availing services.
4. To examine the nature of unfair trade practices in the rural
areas.
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12
5. To assess the level of satisfaction of the rural consumers on
various products and services available in the rural areas.
6. To draw conclusions from the study and suggest remedial
measures for better protection of the rural consumers.
Methodology
The present study is an empirical research based on both primary
and
secondary data. It is a blend of both descriptive and analytical
methods of study.
The secondary data was collected from government publication,
books, journals,
newspapers and various prominent Voluntary Consumer
Organisations working in
this area. The information regarding level and satisfaction,
awareness, attitude and
behaviour of rural consumers at individual and household level
was gathered
through primary surveys. For the purpose an interview schedule
was prepared.
Besides focus group interaction was also done. The questionnaire
was subjected
to reliability by pre-testing the constructed tools by
administering it to 100
consumers randomly. The questionnaire was modified based on the
responses got
from the consumers.
The sample areas were selected in a way that they can best
represent the
entire geographical regions of the country. Consequently, five
states from different
regions of India were selected for the study. They were:
Uttarakhand from North,
Maghalaya from East, Gujarat from West, Tamilnadu from South and
Madhya
Pradesh from Central India. It is true that geographical
location may not
necessarily be the influencing factor of peoples awareness but
such a selection is
necessary to know the level of awareness among consumers, from
all the parts of
the country. The sample was selected from these five states
using the random
sampling technique. From each State two Districts and from each
district two
blocks were randomly selected. From each block four villages
were randomly
selected. It was not difficult to identify a consumer as
everyone is a consumer and
either buys a product or avails of a service for consideration.
The households from
these villages were selected by random sampling technique. Total
sample of 2000
households was taken for investigation from 80 villages (25
household from each
village) spreading across ten Districts of five selected states.
The data so collected
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13
was analyzed and tabulated. Appropriate statistical methods were
applied to
classify and analyze the data, collected on the subject.
Sample Area
State District Two blocks randomly selected from each
district
Ahmedabad Daskroi Bavla Gujarat Junagarh Veraval Talala
Bhopal Phanda Berasia Madhya
Pradesh Jabalpur Sihore Kundam
East Khasi Hills Mylliem Mawryngkneng Meghalaya Ribhoi Umsning
Umling
Kanyakumari Agasteeswaram Thovalai Tamilnadu Viudhnagar
Aruppukottai Kariapatti
Nainital Bhimtal Dhari Uttarakhand Pauri Garhwal Pauri Kot
All India (2000)
Tamilnadu (400)
Mehalaya (400)
MP (400)
Gujarat (400)
Two Districts from each State
(2x5 =10)
Two Blocks from each District
(2x10 = 20)
Uttarakhand (400)
Four Villages from each Block
(4x20 = 80)
25 HH from each village
(25x4 = 100)
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14
Work plan and its phasing:
Work Plan Months
1 2 3 4 5 6
Phase 1- Identification of District and Villages and Resource
Planning
Phase 2- Collection of Primary and Secondary Data
Phase 3- Data Analysis and Report writing
Phase 4- Final Report Preparation and Plan formulation
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15
CHAPTER II
PROFILE OF RURAL CONSUMERS
Introduction
India lives in numerous villages, scattered throughout the
country. Rural
areas currently are home to nearly 70 percent of Indias
population and have
historically accounted for more than half of Indian consumption.
Even with
increasing urbanization and migration, it is estimated that 63
percent of Indias
population will continue to live in rural areas by 2025. In
terms of economic output,
rural India accounts for almost half (48%) of the countrys
economy, and the rural
markets have the potential to reach $500 billion by 2020. Thus
rural areas will
continue to remain vitally important to the Indian economy.
However, it is
unfortunate truth that a large percentage of this population
lives in high risk and
unpredictable environment. Large section of the population lacks
even basic
services like education, health, drinking water, sanitation and
employment.
Providing rural India with better access to services,
technology, education and
health care will reduce inequality, alleviate poverty for
hundreds of millions of
Indias citizen and add an additional engine of growth to Indias
bulging economy.
The rural population in India comprises the core of Indian
society and
represents the real India. According to the 2001 census, there
are 5, 80,779
villages in India and about 74% of Indian population lives in
these villages. The
number of people living in each of these villages also varies
considerably. It is
found that most of the Indian villages have a population of less
than 10,000 while
there are only a few villages where more than 10,000 people live
(Table 1). The
country opened up its economy in 1992 and since then due to
globalisation and
liberalisation the market is flooded with new products and
services. Technological
revolution and information explosion have also given tremendous
boost to
consumer culture. The consumers have been sucked into the market
economy and
today the market determines the needs and preferences of the
consumers. This
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16
consumer culture and the changing consumption pattern is now not
only confined
to the urban areas but is going deep down to the rural markets.
The rural markets
are the new hunting grounds for the business.
Table 1 Location and Concentration of Rural Population
Population Range (No of
Persons) Number of
Villages Proportion to Total Village
Proportion to total Rural Population
Less than 200 103952 17.9 1.7 200 to 499 141143 24.3 7.8
500 to 9991 144998 25 16.8 1000 to 1999 114395 19.7 25.7 2000 to
4999 62915 10.8 29.8 5000 to 9999 10597 1.8 11.2
10000 and above 2779 0.5 7.0 Total 580779 100 100
Source: Census of India, 2001
Given the rapidity with which urban population is growing, the
share of rural
population may come down to 70 percent by the turn of this
century. While a
quarter (25.70 percent) of population of India is classified as
urban (in 1991), only
20.83 percent of the labour force lives in cities. Rural areas
thus sustain four-fifth
of the total labour force (main workers) of the country. More
than two thirds (63.2
percent) of the working population is engaged in agriculture and
allied activities (as
cultivators, agricultural labourers and live-stock farmer, etc.
(Table 2 and Figure 1)
Table 2 Occupational Pattern of Rural population
Occupation Proportion to Total Rural Population (in %)
Agricultural 50 Agricultural labour 27 Business 10
Non-agricultural labour 9 Salary earners 2 Not gainfully employed 2
Total Rural Population 100
Source: Census of India, 2001
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17
Though large parts of rural India continues to be abjectly poor
and
dependent upon unprofitable agriculture business, yet there is a
new emerging and
expanding rural India as well. This rural India is prosperous
and has money power,
consisting of self employed people. Thus rural India with
significant income growth
and employment diversity is a potential market for business to
capture. The rural
consumers have now started demanding life improving products and
services of
real quality and durables that enhance productivity and increase
earning. Though
the penetration of most products in rural India is still very
poor, however, a small
penetration of a large population results in a very large actual
market size. Thus
rural markets are and will continue to remain attractive and
important.
Figure 1
Occupation of Rural Population
Source: Census of India, 2001
PROFILE OF RURAL CONSUMERS
Sources of Rural Income
The share of rural activities in the gross National Product of
the country is,
however, secularly declining. Agricultures share in the GDP in
1951 was 65
percent; it declined to 45 percent in 1971. In 1990-91, the
contribution of
agriculture towards Gross Domestic Product (GDP) output was at
32%, which has
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18
decreased to 20% by 2005-06. If this trend continues, the output
would be
expected to decrease further. This makes us think about the fact
that the Indian
economy is mainly dependant on agriculture, but in the future it
would contribute to
only 10-15% of the GDP. We need to look into the reasons for
this worrying trend.
Agriculture is undoubtedly the most important sector from the
point of view of
inclusion, since it is the primary source of income for about
half the population
even today. (Table 3 and Figure 2) The slowing down of
agriculture growth to less
than 2 percent per annum, since the late 1990s has undoubtedly
been the root
cause of much of the rural distress. Naturally then, the per
capita income of rural
population is far lower than that of its counterpart living in
urban areas.
Table 3
Source of Income of Rural Population
Sources of income Proportion to Total Rural income
Agricultural 59 Agricultural wage 16 Business & Craft 9
Non-agricultural wage 7 Salaries 3 Current transfers 2 Others 4
Total 100 Source: Census of India, 2001
Figure 2 Sources of Income of Rural Population
Source: Census of India, 2001
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19
There are more poor in rural than in urban areas whether one
looks at
poverty in terms of absolute number or in terms of percent of
population below the
poverty line. A substantial number of urban poor have deep roots
in rural areas.
When we look at the question of poverty in terms of access to
work opportunities
and basic needs, the rural parts of India are in far worse
situation. Self reliance
which made rural people meet their basic needs in most adverse
circumstances
stands totally destroyed. Government, which professed and
promised to uplift them
from the miserable living conditions, has failed to do much, if
the records of the last
five decades are any indicator.
Land in its broadest sense is the most vital resource of rural
India. Its
importance further increases in the context of rapid growth of
population
particularly in rural areas. The first task of any meaningful
rural development policy
is to ensure access to land for all those who were denied the
same. Another major
task would be to diversify the rural economy to such an extent
that dependence of
the people on agriculture declines. Agricultural census returns
have consistently
shown iniquitous distribution of arable land in India. In 1971,
the country had 71
million operational holdings which increased to 105 million in
1990-91. The
average size of holdings, however, declined from 2.28 ha in
1970-71 to 1.57 ha in
1990-91 indicating increasing pressure of population on land
resources. When we
look at the size of distribution of holdings, we find that 69.9
percent of holdings
were small i.e. less than 2 ha in 1970-71. The proportion
increased to 78.9
percent in 1990-91. The share of marginal holdings (less than
one ha) also
increased from 51 percent to 59 percent. In 1970-71, almost 70
percent (69.90
percent) of the total operational holdings accounted for only
20.9 percent of the
area operated.
According to the NSS Report No. 492 on Some Aspects of
Operational
land Holdings in India, 2002-03, released in 2006 there were
101.3 million
holdings operated during the kharif season of 2002-03 and 95.7
million holdings
operated during the rabi season of the same agricultural year.
The average area
operated per holding in 2002-03 was 1.06 hectares compared to
1.34 hectares
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20
during 1991-92 and 1.67 hectares in 1981-82. Marginal holdings
(of size 1 hectare
or less) in 2002-03 constituted 70% of all operational holdings,
small holdings (size
1 to 2 hectares) constituted 16%, semi-medium holdings (2 to 4
hectares) were
9%, medium holdings (4 to 10 hectares) were 4%, and large
holdings (over 10
hectares) less than 1%. The share of marginal holdings in total
operated area
climbed by 6-7 percentage points since 1991-92 to reach 22-23%,
drawing level
with the shares of the semi-medium and medium holdings, which
had the largest
shares in 1991-92. Tenant holdings, that is, holdings with
partly or wholly leased-
in land, formed about 10% of operational holdings during 2002-03
compared to
11% in 1991-92. On an average, a tenant holding operated 0.7
hectares of
tenanted land in 2002-03. The share of leased-in land in total
operated area, which
has been declining more or less steadily from 10.7% in 1960-61,
was 6.5% for the
kharif season of 2002-03. Today land has become the most
valuable asset for the
rural inhabitants due to lack of employment as a result there
are serious protests
as a result of land acquisition.
The report of the global Hunger Index 2007 from International
Food Policy
Research Institute (IFPRI) has ranked India 94th, well behind
neighboring China
and Pakistan, in its overall list. Worse, while much is being
made out of India being
a young country, the report said that 40 percent of the worlds
underweight children
below five years live in India while more than half of all
children with low birth
weight are born in South Asia. The report said that though India
has improved its
score of 25.03 on the index compared to 33.73 in 1990, it is
lagging behind China
and Pakistan ranked at 47 and 88 respectively, in the list of
118 countries. The
index is primarily based on a comparison of the undernourished
out of the total
population of a country and prevalence of under weight children
below five years.
One in seven people go to bed hungry every day, which counts up
to 854 million
people worldwide. Hunger is one of the worlds major problems and
therefore one
of its most important challenges, the report states.
Besides, Indias score on the progress indicator of the Global
Hunger Index
is 0.496. It reduced hunger by 8.7 since 1990 whereas the
reduction target was
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21
17.6 for the period from 1990-2015. In India where a large
majority of the South
Asias population lives, economic growth in the agricultural
sector has lagged
considerably behind the growth in other sectors in recent years.
This has a
negative effect on the progress in alleviating poverty and
hunger in rural areas,
the report stated. Further, it added that members of the lower
castes and certain
ethnic minorities continue to be discriminated against in the
society and are
therefore in a disadvantageous position in regard to educational
opportunities and
the labour market. The report published by the National
Commission for
Enterprises in the Unorganized Sector (NCEUS) in August 2007 had
come out with
similar findings. The NCEUS report had stated that agricultural
labourers are
among the most marginalized group among the rural poor, at the
lowest rung of
poverty levels.
On malnutrition in the South Asian Region, the IFPRI report said
that in
some parts of India, for instance, male and women make do with
the leftovers. This
results in children of undernourished and anemic mothers too
have a higher risk of
being born underweight.
Rural Consumers
The rural consumer is generally seen as the less affluent, as
compared to
his urban cousin but things are changing in rural India over the
last ten years. Like
any market that has seen a demand and awareness boom, rural
India has also
been witnessing considerable rise in purchasing power. A change
in consumption
patterns and access to communication media have made rural
market a vital cog in
the sales-growth wheel, especially with demand for many
categories of products
and services plateau in the urban markets. In spite of
increasing number of rural
consumers, provisions for consumer protection and welfare are
often based on the
general standard and circumstances of those living in big cities
and towns.
Although consumers as a whole are in an equal bargaining
position, there are
certain recognizable groups which are disadvantaged in more ways
than the
others. Disadvantaged consumers are those who are less able to
assert their rights
and rural consumers comprise one such group. Rural consumers
remain
disadvantaged as their right to information, choice, redress,
and consumer
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22
education are not sufficiently fulfilled. Consequently such
consumers need support
in maintaining their rights so that they can bargain equally
with the producers or
the service providers.
Marketing and Research Team, (MART) an organization involved
for
decades in rural marketing research, has over the years built up
a veritable trove of
research on rural consumers and their consumption patterns. Some
of the findings
were presented by the President, MART at the Rural Marketing
and
Communication Conference organized by the Federation of Indian
Chamber of
Commerce and Industry (FICCI) at Delhi held in 2003. The
following are the
findings of MART:
1. The rural consumer may not be very educated, but he is
certainly astute,
with a lot of common sense and practical experience of handling
the
vagaries and uncertainties of life. He displays great ingenuity
and
adaptability as evidenced by his learning to repair his tractor,
hand pump
and motorbike, and finding a host of local solutions in everyday
life.
2. Though low on economic resources, he does not go in for only
'cheap
products but looks for value for money. Perception of a premium
product
is not yet relevant in rural markets, with consumers more
concerned with
functionality than unnecessary frills with a consumer durable.
Too many
features with a product tend to confuse the rural consumer.
3. Rural consumers are generally mistrustful and wary of
urbanities and
turned off by their patronizing attitudes. It is not easy for a
rank outsider
to get the rural consumer to spend money.
4. Brand adherence is high among village consumers. This may
not
necessarily be on account of loyalties. Limited access to
alternatives and
lack of information about possible choices do make them 'stick'
to tried
and tested brands.
-
23
5. Brand recognition is often on the basis of logos, symbols,
colours rather
than the exact brand name. This tendency is partly responsible
for the
widespread menace of spurious products in rural markets, as it
is easy
to deceive the rural consumer with look-alikes.
6. A very high degree of involvement characterizes purchase of
expensive
products like consumer durables. A lot of checking and
counterchecking
is done to seek reassurance on the soundness of the buying
decision.
Marketers must embody reassurance and provide opportunity to
'see
and touch' the product in their marketing communication
processes.
7. Routine is important to a rural consumer's life as a lot of
time consuming
activities characterize his everyday life. The routine is
governed by
nature and seasons, not by the calendar or the clock. Sunday is
not
typically a holiday. In buying processes, the consumer is not in
a hurry
and cannot be pushed into a hasty purchase for these
segments.
8. Rural incomes show a great seasonality for the segment of
large
farmers. The segment of petty farmers, farm labour, non farm
workers
and the salaried class show a greater regularity of income
patterns so
the consumption cycles are also more regular and
predictable.
9. On account of far higher degree of inter personal
communication
characterizing village life and relatively low penetration of
mass media,
word of mouth is a very effective medium of influence
generation.
Existing users, dealers, village influential, youth studying or
working in
urban locations are all consulted before making purchases.
10. Among the households with TV ownership, TV viewing is the
highest
among women and children who in contrast to the traditional,
household
head dominated decision scenario are fast emerging as demand
generators for the household goods. Decisions on durables like
radio,
TV and two wheelers are still male dominated decisions, taken
in
consultation with other people in the community.
-
24
11. The rural youth are increasingly becoming more exposed to
urban
lifestyles on account of their frequent visits to urban
locations either for
higher education or for work. Their media exposure to television
is also
much higher. This makes urban lifestyles an inspirational model
for them
and their preference for national brands is on the rise.
12. While culture and social norms have a greater hold on rural
consumer
than urban ones, perceptions, traditions and values vary from
state to
state, sometimes from region to region. It is, therefore,
difficult to work
with a pan rural Indian communication package. Two step flow
of
communication, using opinion leaders and mass media both, seems
to
work better in rural settings. These observations made on the
basis of a
host of research based inputs make it very clear that rural
marketing
effort cannot be visualized as a simple extension of the urban
marketing
process. It is a different market and presents a different set
of premises
on the basis of which suitable marketing.
Impact of globalisation
The impact of globalisation is being felt in rural India as much
as in urban.
But it is slow. However, in the long run it will have its impact
on target groups like
farmers, youth and women. In some states the affluent farmers,
today 'keep in
touch' with the latest information and maximise both ends.
Animal feed producers
no longer look at Andhra Pradesh or Karnataka. They keep their
cell phones
constantly connected to global markets. Surely, price movements
and products'
availability in the international market seem to drive their
local business strategies.
On youth its impact is on knowledge and information and while on
women it still
depends on the socio-economic aspect.
Rising Rural Prosperity
Rural consumers have acquired importance as India is now seeing
a
dramatic shift towards prosperity in rural households. Rural
India with its traditional
perceptions has grown over the years, not only in terms of
income but also in
terms of thinking. The purchasing power in rural India is on
steady rise and it has
-
25
resulted in the growth of the rural markets. The market has been
growing at 3-4
percent per annum adding more than one million consumers every
year. According
to a study by the National Council for Applied Economic Research
(NCAER), there
are as many middle incomes and above households in the rural
areas as are in the
urban areas. Moreover, there are almost twice as many lower
middle income
households in the rural areas as in the urban areas. At the
highest income level
there are 2.3 million urban households against 1.6 million
households in rural
areas. As per the NCAER projections, the number of middle income
and high
income households in rural India was expected to grow from 80
million to 111
million by 2007. In urban India, the same is expected to grow
from 46 million to 59
million. Thus, the absolute size of rural India is expected to
be double that of urban
India. The rural households constitute 72.6 percent with a
population of 74.6
percent while 27.4 percent constitute the urban households with
a population of
25.4 percent.
Table 4 Percentage Distribution of Households
Source: Social Changes and the growth of Indian Rural Market: An
Invitation to FMCG Sector by S. John Mano Raj & Dr. P
Selvaraj
Table 5 Income-wise Distribution of Population
2001-02 2006-07 Income groups
Total Rural No. % Total
Rural No. %
High 1.48 0.41 27.7 2.96 0.7 23.6
Middle 69.18 4.83 64.8 90.25 59.85 66.3
Low 32.29 29.52 91.42 20.41 95.8 95.7
Total 102.95 74.76 72.6 114.52 80.96 70.7
Source: NCAER cited in Social Changes and the growth of Indian
Rural Market: An Invitation to FMCG Sector by S. John Mano Raj
& Dr. P Selvaraj
Area Households Population
Rural 72.6 74.6
Urban 27.4 25.4
All-India 100 100
-
26
Figure 3 Growth of Rural Population by Income Groups
Growth of Rural Population by Income Groups 27.7
64.8
91.4
2
72.6
23.6
66.3
95.7
70.7
0
20
40
60
80
100
120
High Middle Low Total
Income Groups
2001-02
2006-07
Figure 4 Growth in the Number of Rural Households
Growth in the number of rural households (%)
12
113
35
76
75
185
119
32-
51-
11-
2009-10 to 2015-16**
2004-05 to 2008-09
Upper-middle
Highest
Middle
Lowe-middle
Lowest
-
27
Figure 5
Age wise Growth of Rural Population
(All Figure in Million)
119. 5
233. 3
90. 7
82. 1
141. 9
104
73. 3
31. 1
70.6
108.5
239.1
0
109.0
0
90.2
0
156.6
0
121.6
0
85.7
0
26.4
0
62.3
0
0
50
100
150
200
250
300
0-4
5 t
o 1
4
15
to
19
20
to
24
25
to
34
35
to
44
45
to
54
55
to
59
60
+
Age Group
1996
2001
Source: Registrar General of India
Gone are the days when the rural consumer went to the nearby
city to buy
branded products and services. The rural consumer is growing and
the global
players in the market are trying to grasp the market share
whether it is into
FMCGs sector or retail sector. Some FMCG products like
toothpaste, hair oil and
other like shampoos have done much better in rural areas than in
the urban and
the semi urban areas. The estimated annual business from rural
markets is around
1, 23000 crores, comprising 65000 crores of FMCG ` 5000 crores
of durables, `
45000 crores of agricultural inputs including tractors and `
8000 crores of two
wheeler and four wheelers. Similarly the retail sector has a
huge potential for
growth and the opportunities in retail sector is expected to
touch $43 billion by the
year 2010.
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28
Growth of Rural Markets
In recent years rural markets have acquired significance in
countries like
India and China as the overall growth of the economy has
resulted into substantial
increase in the purchasing power of the rural community. On
account of
globalization and liberalization the rural areas are consuming a
large quantity of
industrial and urban manufactured products. Rural market has
witnessed a high
demand both for products and services. For several product
categories, rural
markets account for well over 60 percent of the national demand.
It is the rural
segment of the market that contributes more profit than its
urban counterparts. The
general impression is that only agricultural inputs like seeds,
fertilizers, pesticides,
cattle feeds and agricultural machinery have a potential for
growth in the rural
market. However, there is a growing market for consumer goods
now. It has been
estimated that the rural market is growing at the rate of five
times its urban
counterpart (Tables 6, 7, 8, 9, 10, 11 and Figure 7)
Table 6 Comparison of Average Rural and Urban Monthly Per
capita
Consumer Expenditure of Major States in 2007-08
Average MPCE (````) State Rural Urban
Andhra Pradesh 816 1550
Assam 799 1452 Bihar 598 1080 Chhattisgarh 582 1503 Gujarat 875
1471
Haryana 1034 1628 Jharkhand 592 1395 Karnataka 819 1668 Kerala
1383 1948 Madhya Pradesh 634 1190
Maharashtra 868 1709 Orissa 559 1438 Punjab 1273 1633 Rajasthan
801 1265 Tamil Nadu 834 1410
Uttar Pradesh 680 1121 West Bengal 702 1452 All India 772
1472
Source: NSSO, Ministry of Statistics and Programme
Implementation, Govt. of India, 2007
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29
Table 7
Size of Rural Markets
States Market Size (Crores)
Rural population (Millions), 2001 Census
Market Size per Capita (`)
Gujarat 86,451 31,740,467 27,237
Tamilnadu 61,422 34,921,681 17,589
Madya Pradesh 51,102 44,380,878 11,514
Uttrakhand 14,796 6,310,275 23,447
Mizoram 773 447,567 17,271
Andhra Pradesh 130,611 55,401,067 23,576 Assam 36,880 23,216,288
15,885 Arunanchal Pradesh 1,831 870,087 21,044 Andman & Nicobar
623 239,954 25,963 Bihar 57,062 74,316,709 7,678 Chhttisgarh 33,859
16,648,056 20,338 Chandigarh 525 92,120 56,991 Delhi 4,944 944,727
52,333 Dadar & Nagar Haveli 349 170,027 20,526 Daman & Diu
545 100,856 54,037 Goa 4,292 677,091 63,389 Himachal Pradesh 18,404
5,482,319 33,570 Haryana 53,455 15,029,260 35,567 Jharkhand 37,721
20,952,088 18,003 Jammu & Kashmir 15,307 7,627,062 20,069
Kerala 60,327 23,574,449 25,590 Karnataka 70,044 34,889,033 20,076
Lakshadweep 349 170,027 20,526 Maharashtra 126,313 55,777,647
22,646 Manipur 3,845 1,590,820 24,170 Nagaland 4,078 1,647,249
24,756 Orissa 57,254 31,287,422 18,299 Punjab 39,867 16,096,488
24,768 Pondicherry 814 325,726 24,990 Rajasthan 62,082 42,292,813
14,340 Sikkim 1,278 480,981 26,571 Tripura 6,593 2,653,453 24,847
Uttar Pradesh 146,528 131,658,339 11,129 West Bengal 122,703
57,748,946 21,248 Source: Indicus analytics
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30
Table 8 Average Monthly Expenditure per person (`) at Current
Prices
(in `) Rural Urban
Years Fo
od
No
n-f
oo
d
To
tal
Fo
od
No
n-f
oo
d
To
tal
27th round (oct1972-sept 1973) 32.16 12.01 44.17 40.84 22.49
63.33 32th round (July 1977 to June 1978) 44.33 24.56 68.89 57.67
38.48 96.15 38th round (January 1983 to December 1983) 73.63 38.68
112.31 97.31 68.49 165.8 43rd round (July 1987 - June 1988) 100.82
57.28 158.1 139.73 110.18 249.91 50th round (July 1993 - June 1994)
177.8 103.6 281.4 250.3 207.7 458 55th round (July1999 to June
2000) 288.8 197.36 486.16 410.84 444.08 854.92 61th round (July
2004-June 2005) 307.6 251.19 558.79 447.14 604.95 1052.09
Source : Source: NSS Report No.508, Level and Pattern of
Consumer expenditure, 2004-05
Figure 6
(a) (b)
Expenditure on Food Items
32.16 44.33
307.6
57.67
97.31
139.73
250.3
177.8
100.8273.63
288.8
40.84
410.84447.14
0
100
200
300
400
500
600
700
800
900
1000
27th
ro
un
d
32th
ro
un
d
38th
ro
un
d
43rd
ro