Tag: Business economics

Fake brands are identified under two broad categories, namely:

Counterfeit products: These are fake products that bear identical name of product/ packaging/graphics/colour scheme and even same name and address as the genuine manufacturer. They look exactly like real products other than the legal owner of the real products & trademarks.

Pass-Off products: Such products have a similar sounding name or have a similar spelling with similar looking packaging and design. These products are meant to mislead the consumers who are illiterate or in a hurry to purchase goods.

When brand loyalty is difficult to achieve and brand identification is a big challenge in the presence of fakes and counterfeits, innovation in packaging becomes extremely critical. Since only select people can read the name of the brand in the rural market. These innovations in the form of pack sizes and colours act as differentiator and can create demand-pull because of the excitement they create in the mind of consumers.

Rural markets suffer from the problems of low penetration and poor availability of branded products. Hence, although there exists a huge demand for branded products, there are no distribution channels to make the product reach the customer. This has led to the growth of fake brands.

• Ponds has been replaced by Bond’s talc
• Fair & Lovely by Fair & Lonely
• Lifebuoy by Likebuoy/Lifeboy

Fake brands exist in rural as well as urban locations. But the problem is more acute in rural areas especially the deep pockets which are less accessible and people have very little knowledge about the original brands. “Most people in rural India can recognize alphabets but not complete words, so during a research, we found a whole lot of samples of fake Clinic Plus shampoo sachets where the visual was similar to the original brand but the name was changed to ‘Clinton’ as Bill Clinton was to arrive soon in the country. During another such raid, we collected about 99 variants of Fair&Lovely cream including Fair&Lonely, Far & Lovely etc.”, said Mr. Pradeep Kashyap, president, Rural Marketing Association of India (RMAI) and CEO, MART while sharing an interesting incident in past.

The Indian rural landscape being scattered in smaller villages, gaining access in all of them is a tedious task for brands. Also, most of the FMCG brands have not been able to set up an efficient distribution network in such areas. The local entrepreneurs are well aware of these challenges. Hence, take advantage by manufacturing cheap substitutes of original brands, misleading the rural consumers. These manufacturers have an advantage of being local and thus reach the shops before the original brands do.

Such counterfeits piggy back on huge marketing budgets of FMCG companies. The rural consumers are aware of the brand owing to ads broadcasted on radio & television channels. But on time of purchase, the consumers tend to pick their fake counterparts due to unavailability of original product or get fooled by the retailers who on purpose sell cheap products for higher margins.

Over the time the share of fake products in the FMCG market has grown to 10- 15% causing a deep hole in the pockets of the FMCG companies.  A study conducted by AC Nielson, a research agency reveals that FMCG industry loses around 2500 crores annually to counterfeits and pass-off products. In another recent survey conducted by AC Nielson reveals that top brands in India are estimated to lose up to 30 percent of their business to fake products. Besides the loss of revenue, the leading companies also bear the damage to brand image and brand loyalty of consumers.

On a whole, the brands not only suffer in terms of revenue but also have to compromise on the brand image which in no case can be tolerable. Therefore, various brands have come up with unique strategies to overcome their shortcomings in the rural markets and curb the growth of fake brands in rural areas.

Companies like Coca-Cola have set up an elaborate system to curb the menace of duplicate manufacturers, offering incentives to informers.  It has 48 consumer response coordinators across the countries who work with their teams and redress consumer complaints directly, including overcharging and spurious bottling. Besides, it has a large network of route salesmen who have a one-to-one relationship with the retailers on their beat and keep their ears to the ground. When they spot suspicious activity, they inform company officials. So though it is impossible to stop counterfeiters totally, it is possible to minimize the damage they cause.

Upgrading the product packaging periodically or launch product variants so that the manufacturers of counterfeits find it difficult to copy their products. Hindustan Lever has initiated special tamper-proof packs for its deodorant spray ‘AXE’, whose nozzle can’t be detached from the body while Procter and Gamble uses special labels for its Vicks Vapo Rub which does not peel off even if soaked overnight in water. This makes it difficult for spurious goods makers to imitate.

Stopping the counterfeits market is a long process but it’s more important for companies to create awareness among the consumers about the ill effects about such fake products and the hazards they pose.

Companies should not only price their products competitively, but also offer their rural prospects the maximum value for money spent. Indian companies can do this by putting in place an aggressive cost structure. Re-designing of products for the rural market should be done in a manner to maintain a low cost for the products. Refill packs are a good example in this case.

Law of demand says ‘Higher the price of the products, lower will be the demand of the product and lower the price of the product, higher will be demand for that product’. This law is totally applicable in the rural markets. Because of the relatively lower income, the rural consumer is more sensitive towards price. Marketers have to plan their activities in order to bring down the cost of production. They have to bring down the price in order to attract the customers e.g. Nirma Washing Powder.

The price decision must be influenced not just by the income received but also on when it is received and how it is allocated as rural consumers either get daily wages or the farmers get major income during the harvest season.

Companies must follow the strategy of penetration pricing with the backup of a good quality product to be successful in the rural market. As ‘two for one’ deal and coupons are not very effective marketing tools, it is far better to price the product as low as possible in the first place.

FMCG companies can cut cost to maintain the price points through reducing the net weight of the products or doing away with freebies and promotions. In developing markets, the profit margin on individual units will always be low. What really counts is capital efficiency getting the highest possible Returns on Capital Employed (ROCE).

The key is to make constant efforts to reduce capital investments by extensively outsourcing. Manufacturing, streamlining supply chains, actively managing receivables, and paying close attention to distributor’s performance. Very low capital needs, focused distribution and technology investments and very large volumes at low margins lead to very high ROCE business; creating great economic value for shareholders. The overall impact on the volumes and margins will be based not only on the industry dynamics but also on how intelligently the package is designed.

Price Point:

Low unit packs were there since long; only denomination is different now. The pioneers in this category were tea and coffee marketers. Brooke Bond pack was available earlier in 5 paise, later in 10 paise, 25 paise and 50 paise and then with inflation it became Rs. 1 pack. Now it is the time of Rs. 5 pack.

The current craze for Rs. 5 positioning could be because of Coke’s success in promoting the pouch strategy. Colas helped to highlight the price point to the consumer and their medium weight really threw open the gates for other manufacturers to come and ride piggyback on the Rs. 5 price point. And what is different from the past is that large numbers of product categories are now available in small packs and it has taken the shape of mega trends.

The small packs increase user base, usage occasion and can thus explode the market. The consumer base of soft drink increased from 16 crores in 2002 to 24 crores in 2004. A two-year period for which the Rs. 5-price point remained in force.

The Colas started it but host of other branded products are now realising the importance of being present at Rs. 5 price point. Ready availability of five rupees coin has been an advantage and many consumers are not worried as much about grammage as price. They are used to ask for Rs. 2 or Rs. 5 worth of commodity.

Some of the brands that HUL sells for Rs. 5 are Pond’s Talc, Pond’s Cold Cream, Rin, Taaza, Fair & Lovely and Lux. The price point also helps branded FMCGs, which are battling fakes from unorganized sector. Rs. 5 price point leads to growth in user base of brands and increased category penetration for those who have introduced such packs.

Key to successful rural marketing lies in selling goods and services that can be afforded by villagers. Most of the rural population depends upon agriculture for livelihood and as such their income is irregular. Also the per capita income of the rural areas is lower.

It is estimated that more than two-thirds of Indian villagers belong to low income group, and thus they are very much price-sensitive. A villager will purchase a particular product only if he feels that he is getting enough value for it.

Rural population normally does not indulge in conspicuous spending. In order to sell to the village markets, many organizations developed low priced options specifically suited to the rural customer’s pockets. Britannia’s tiger biscuit is a low priced snack which is popular among village kids.

In the year 1998, Lg electronics introduced its sampoorna television range targeted at rural buyers. Procter and gamble brought out tide naturals, a comparatively cheaper detergent powder. Most brands of shampoo are available in sachets priced at Rs. 2-3.

The nature of competition in rural market is very different from that of the urban one. The number of brand options available to the rural consumer is very different from the one available to urban consumers. The brands rarely compete with one another on the retailers’ shelf space but they have to be just there and then through the influence of the retailer they can find way into customer’s home.

Thus, the competitive strategy with regard to rural market varies on almost all the five forces, which clearly suggests that the strategic approach required for the rural market is very different from the one adopted in the urban market.

The focus remains on the people who are living in the remote areas, and the marketing activities should be planned accordingly. Seeing this, now-a-days many companies are turning towards the rural market to expand their scope, and to overcome competition or to restart or give new shape to competition. A lot of focus is required to be given on the rural markets because rural markets are the “tomorrow’s markets”.

Now-a-days people say that there is lot of competition in the market. Actually it is not only lot of competition but cut throat competition, especially in the urban areas. Companies are playing on the basis of price. Every big company is trying to swallow the small and new companies. Prices are going down steeply just because of the tough competition.

Apart from the price factor, companies have started increasing product features and added value to their products to compete in the market, without increasing the prices. The concept is increase the utility and value and decreases the prices. Irrespective of the above facts, there are certain products which have already achieved the maturity level or have reached the saturation level. Demand is not increasing in these sectors so the best strategy is to explore new markets for the products.

So rural marketing is turning out to be a market for the packaged products with a minimum or no competition. Firms can generate demand and increase profits.

The changing competition in the market research industry has also influenced the foray into quasi- consultancy. Though the number of research agencies in the country has not increased considerably from the 30-odd agencies that were around 10 years back, mergers and tie ups over the past three years or so have changed the structure of the business. In the 1980’s, the two agencies, IMRB and ORG-MARG dominated the Indian market research scene, followed by Mode.

In the mid-nineties, Bangalore based Research and Consultancy Group (RCG) tied up with MBL and was eventually taken over by the inter public group’s $450-million market research company, NGO World group. Around the same time, AC Nielsen entered and bought a stake in MRAS while TNS bought a stake in Mode. Dutch giant VNU bought a stake in ORG-MARG in 1996.

Several new outfits have also stepped in by this time. For example, Blackstone, a small outfit from the US, set up shop and teamed up with a large American agency, Market Facts, in India. Market Probe, a boutique U.S. company, set base in 1999. Then MBA, a small Mumbai-based outfit, tied up with Gallup. Barring the WPP Group’s Research International, which has been here since 1992, most global players came to India in the last three years.

If the newer players ushered in change through branded techniques, then the pre-reform players like ORG-MARG and IMRB had vast databases, could over two decades or more that could be used to better effect. The nature of the market is changing too with the advent of Internet and Information technology era. The Telecom and Financial Market reforms also opened up the market and newer avenues like consultancy research opened up.

Till the 1980s, market research was restricted to the data delivery function alone. As competition grew, predicting consumer behaviour came to the forefront of client demand. So, research agencies started adding value by defining what kind of information should be collected rather, than merely sticking to the client’s brief.

For example, a soft drink player today would also look at competition from a category like bottled water. Similarly, a moisturizer would also compete not only with other moisturizers but also with skin lotions and homemade products like malai and so on.

Marketers also agree that the needs are evolving. For example, the new area that HLL has added to its research requirements is the concept of consumer windows. HLL has two consumer windows-one is the traditional view of consumers through market research and the second is direct customer contact. For the latter, a website was set up, where HLL managers across the country can log in and request for an interface with any type of consumer across India.

The request is then processed by the research agency, which organises meetings between the managers and the consumers. HLL claims that after this window was set-up, every day, roughly nine managers contact consumers in 20 locations and interface with five consumer groups.

For instance, when sales of Lifebuoy, one of HLL’s designated ‘power’ brands, were tapering, the consumer window sessions, especially in rural areas, helped the company change the product composition from carbolic to non-carbolic and reposition the soap from a male market to a family product.

Marketing Research techniques and tools always have to be adapted to the target group. Rural marketing research is undergoing a major transition as the scope of the research is expanding with the rising size and potential of the rural market. The mostly quantitative approach followed so far is giving way to behavioural and qualitative studies. In view of the illiteracy and lower exposure of rural consumers, however, tools are required to be specifically adapted or designed.

Branding Strategy:

To build a brand in rural market, products have to be geared to rural in terms of price, packaging and communication and delivered to target audience in the language they understand using the idiom specific communication.

In packaged goods industries (FMCG), reduction of the number of brands and creating master brand to serve many segments by product variety or brand extensions is a strategic option adopted by many players. The high cost of building many brands is significantly lowered if only few master brands have to be developed and promoted for different but related products.

Logos and Symbols:

Use of symbols like muscle man for MRF, lightening for Rin, helps the rural consumers to identify brands at the time of the purchase. If, the logos or symbols are not registered very clearly in the mind of illiterate rural consumer, then it is easier for the retailer to sell a fake or counterfeit version of the brand.

As most of the rural consumers do not know English and products of most of the national level companies are using only English language, the highlighting of logos and symbols can help the rural consumers to identify the brand during the final selection.

The sun symbolises life, moon depicts love and stars represent destiny, with such perception and interpretations symbols become very vital consideration for effective rural communication. Certain successful brands in rural market have numbers, symbols and animals as brands e.g., 555 soap, Monkey brand toothpowder, Gemini tea (with elephant), etc.

Logo and the colour are not the only factors that influence purchase. There are other factors to be considered like size of logo, shade of color and also the significance of combined effect. Rural markets respond in different ways to different symbols than the urban consumers.

With rapid urbanisation and technological advancement, there is a shift in the pattern of consumption of the people in the rural areas. The transition has been studied in light of the objectives which were set at the beginning of the survey. These underlying objectives were to study the- changes in the pattern of consumption concerning the food items like cereals, pulses and beverages, non-food items like clothing, mobile, television and services like beauty clinics, barbers, and private tuitions, medical. Besides, this the gaps in rural markets regarding the availability of various ranges of products, services and understanding the opportunities to intervene.

As the time is changing the earning, consumption and saving pattern of the Indian consumers are also changing. The research made by Centre for Macro Consumer Research (CMCR) of the National Council of Applied Economic Research (NCAER) reports that there will be rapid shift of 42% in the income level of the rural households by 2015. This would become possible due to the development in agriculture, and other activities like construction, retail, trading, etc.

There is a huge dramatic change in the rural sector with a change with the shift in the income earnings and the consumption patterns of the rural consumers. But there is a huge disparity between the income generation and consumption pattern among the various states of rural India. Bridging this gap is a big challenge for the marketers and government.

There has been an overall change in the pattern of consumption expenditures made by the households. The consumption pattern has shown its changes concerning different periods of time, as in Financial Year 17-18, five years back and further to this again a ten year back data. Even the type of crops which were cultivated by the households across periods has shown changes. Traditional rain-fed paddy has been replaced by the scientific cultivation of paddy through System of Rice Intensification methods. Besides, changes are also prominent in consumption expenditures made by the households. If consumption expenditure is tracked for respondents, it becomes apparent that the portion of expenditure on food items made during the period FY 17-18 is less as compared to the figures five years back and furthermore for ten years back. Further, to this, the expenditure on items which are like packaged foods, beverages, gutka & Pan Masala shows displays a different trend.

The consumption of liquid beverages was more five years back while it is relatively less now. This can be attributed to the spread of print and social media campaigns which has made the respondents aware of health benefits and ill effects. However, the expenditures have constantly increased over the non-food heads like private tuitions, medical treatment and toiletry, cosmetics as compared to the data of 5-10 years back.

When the attitude of the respondents is captured over their behaviour in the market, it is interesting that the share of expenditure of the respondents on items like furniture, mobile batteries, mobile repair has increased over time.

The number of earning members from a family has also come up recently, the households previously were mostly dependent on one person for income, but now, some earning members are 3-4. The business establishments mostly have found that their returns are high if they run food stalls in Thela and temporary makeshifts selling tea and evening snacks. Respondents, especially the women folk have potential to earn a higher income by taking up vocations around the promotion of traditional skills like weaving.

The occupation pattern reveals the income generation pattern also. From the Table 3.7, we can find out more than 40% of rural people are engaged in agricultural and allied activities. Next followed by the wage earners, salary earners, and small shop keepers and so on. If we compare with urban sector, rural sector hits very little percentage of professionals and businessman.

In contrast, nearly 40% of urban people are earning regular salaries and just 3.45% of people alone engaged in agriculture and related activities. Wage earners and small shop keepers comes in the second and third place respectively which is similar in the rural sector and followed by the artisan, businessman etc.

Marketing can refine entire living style and system. Better quality products at reasonable price, improved income level, availability of facilities, etc., have direct positive impacts on quality of life. Quality of life improves and level crime reduces.

Naturally, marketing acts as catalyst agent for economic growth. There exists more attractive business opportunities in rural than urban. Rural market is more potential for consumer durables and services. Rural population largely depends on agriculture and it can contribute nearly 50% to total national income. Agriculture enjoys significant portion in export business, too. Rural marketing improves agricultural sector and improved agricultural sector can boost whole economy of the country.

The total cultivation area, approximately 74% is occupied by food crops and only 26% is occupied by non-food crops. This situation clearly exhibits the excessive dependence on food crops rather than non-food commercial crops. It is because of the farmer’s attitude towards food security i.e., they used to retain sufficient quantities of production for their own consumption and the rest alone goes – to the market.

Take the food crops such as rice, wheat, vegetables etc., as example whose retention quantity is estimated nearly 50%. In contrast, the entire production of non-food crops goes to the market without noticeable proportion of retention like food crops. For example, almost the entire production of cotton, sugarcane, groundnut, etc., are marketed. This has an implication in generation of disposable income.

In general, large farmers are able to generate adequate disposable incomes because they can grow food as well as non-food, commercial crops with the help of sufficient land holding pattern. But the small farmers are in a position to grow only food crops that too in a little quantity and are able to generate small disposable income.

So, the marketers surely show interest to target the large rural farmers. Anyway this situation is slowly changing due to the introduction of latest technologies in the agricultural sector for the result of high yield such as, high yield seeds, cross-cultured seeds, pesticides, etc.

Land Distribution & Use

One of the main obstacles for marketers to exploit the rural market potential has been the largeness of rural markets in terms of the areas it covered. It is much easier to divide it according to the needs of the urban population because of concentration, but it is very difficult in the case of rural market because of their widespread nature.

Distribution of villages in India:

This clearly shows that rural population is distributed in almost about 638365 villages. It is also noted that villages are not uniform in size. About 42 percent of the villages in India has population of less than 500 people in it.

Irrigation:

Irrigation plays a vital role while increasing the potentiality of rural market. Actually, in agricultural sector, many new technologies were implemented in irrigation only such as energized pump sets and so on to improve the overall yield and economy. To improve the irrigated area, many kinds of investment schemes like minor, medium and major are continuously framed and implemented by the Government.

For example, states like Gujarat, Madhya Pradesh and Maharashtra are expected to irrigate about 19 lakh hectares of land from the project Sardar Sarofar Project across river Narmada. We can imagine the prosperity of farmers in these beneficiary states.

The major source of irrigation is wells followed by canals. Nearly about 40% of gross cropped area is from approximately 80 million hectares of gross irrigated area. The important point to be noted here is, still nearly 60% of rural India is dependent on rainfall for their agricultural activities.

Anyway, many steps have been taken and major and medium level irrigation projects also initiated to improve the rural irrigation potential. One more important scheme launched by the Government in the year of 2005 was ‘National Project for Repair, Renovation and Restoration of Water Bodies’.

It mainly focuses on the restoration and augmentation of water bodies storage capacities and recovering and extending their lost potential. ‘Drip Irrigation’ programme was launched to cover more areas under irrigation. Currently, about three lakh hectares are under drip irrigation in various states of India and a great scope to extend this method under the context of shrinking ground water supply.

So, it is very clear that the availability of irrigation facilities leads to the higher technology development and finally results in the increased productivity, income and improved rural purchasing power.

The literacy level of rural people has a considerable impact on the marketing strategies to be adopted by the marketing team especially in communication with the rural people. Higher the level of literacy, the easier it becomes for companies to penetrate into rural areas.

As per the 2001 census, about 50 per cent of the rural population is literate. This has contributed to the increase in rural demand. This has changed the buying behaviour of rural consumers and lifestyles. An increase in literacy levels has resulted in an increase in demand for consumer goods.

From the table, we can make out that there has been a rise in the literacy rate during the last two decades, changes in the literacy rate from 1991 was only marginal. It can be further noticed that only 45 percent of rural people are literate in our country even today.

Although the Central and State Governments have implemented many schemes, severe punishments etc., to stop childhood marriage, keep away from education to girls, killing female child at the stage of birth itself, etc., unfortunately, these customs are still existing in many states of India such as; Bihar, Haryana, Rajasthan, Tamil Nadu, Uttar Pradesh and so on. These are all just because of higher illiteracy level among rural people and particularly lack of literacy level among rural women.

But the rural youth education and literacy level shows a good progress and prosperous rural India. Here, the contribution given by both State and Central Governments to improve rural youth literacy rate is noticeable one. This growth in youth literacy level increases the demand for modern, fashionable, current trend products among the younger generation.

Also, it increases the brand awareness of rural consumers for various products (national and international level). Marketers can make serious efforts to capture these adults’ group (falls in the age group of 20-35), for their products such as perfumes, two- wheelers, western outfits, etc., which accounts nearly 25% of India’s consumption.

Occupational pattern of rural people also has an impact on the nature of income generation, which will in turn affect the expenditure pattern. Purchase behavior of the rural consumers depends upon the nature of occupation and the consistency in the generation of income.

A major section of the rural population relies on agriculture and allied activities for occupation. So, the income in the hands of rural people is very much conditioned by the status of agriculture and other allied activities.

Agricultural and allied activities are the main occupation for the rural people. An allied activity includes Horticulture, Forestry, Fishery, Animal Husbandry (dairy, poultry, and goat), Floriculture etc., the everyday needs of the villagers are also met by many other types of occupations. In rural sector, agri-based occupation can be different types.

The occupations which can be generally seen in the villages are:

1. Farm laborer
2. Milkman
3. Washer man
4. Pot maker
5. Blacksmith
6. Barber
7. Carpenter
8. Cobbler
9. Priest
10. Weaver.

Other rural occupation which are non-agricultural and support agricultural requirements and the rural people in their daily life are:

1. Village doctor
2. Policemen
3. Traditional village nurse
4. Anganwadi workers
5. Teacher
6. Peon
7. Grocer
8. Mechanic
9. Cyber cafe owner
10. Venders
11. Agricultural experts
12. Electricians etc.

Census of 2001 reports that, this agri-based occupational trend is slowly changing and a gradual shift towards non-agri based work has been taken place. As per the NSSO Rounds Survey, for the year of 1999-2000, rural India’s Primary sector workforce accounts for 76.1%, Secondary sector 11.3%, Tertiary sector 12.5% and finally non-farm sector hits 23.8%, which is next to the Primary sector.

Rural housing

Rural electrification

Rural electrification is the process of bringing electrical power to rural and remote areas. Rural communities are suffering from colossal market failures as the national grids fall short of their demand for electricity. As of 2017, over 1 billion people worldwide lack household electric power; 14% of the global population. Electrification typically begins in cities and towns and gradually extends to rural areas; however, this process often runs into obstacles in developing nations. Expanding the national grid is expensive and countries consistently lack the capital to grow their current infrastructure. Additionally, amortizing capital costs to reduce the unit cost of each hook-up is harder to do in lightly populated areas (yielding higher per capita share of the expense). If countries are able to overcome these obstacles and reach nationwide electrification, rural communities will be able to reap considerable amounts of economic and social development.

Productivity and efficiency

In addition to improved education, rural electrification also allows for greater efficiency and productivity. Businesses will be able to keep their doors open for longer and generate additional revenues. Farmers will have access to streamlined modern techniques such as irrigation, crop processing, and food preservation. In 2014, rural communities in India gained more than US$21 million from increased economic activity driven by recent additions of electricity.

Job creation

When expanding the electrical grid, there is a demand for thousands of jobs ranging from business development to construction. Projects to spread electricity create a wealth of job opportunities and help to alleviate poverty. For example, India set a target of 175GW of clean energy to be installed by 2022 to increase electrification throughout the country. An estimated 300,000 jobs will need to be created in order to reach these lofty goals.

Roads for rural marketing

Rural Development is the process of improving the quality of life and economic well-being of people living in rural areas, often relatively isolated and sparsely populated areas.

The term rural development is becoming a buzz word all over the world. As most of the people on earth live in rural areas, development in true sense cannot be expected without addressing the basic necessities of this huge population. In the era of modern science and technology, large amount of population in rural areas are still deprived of adequate nutrition, good education, proper communication, and social justice. Therefore, rural development is gaining importance in both the developed and developing countries.

However, till today, there is no universally acceptable definition of rural development. As a concept, rural development is comprehensive and multidimensional. It means improving the quality of life of the people living in rural areas through agriculture and allied activities. As a phenomenon, rural development is the result of interactions between various physical, technological, economic, socio-cultural and institutional factors.

Rural Development has traditionally centered on the exploitation of land-intensive natural resources such as agriculture and forestry. However, changes in global production networks and increased urbanization have changed the character of rural areas. Increasingly tourism, niche manufacturers, and recreation have replaced resource extraction and agriculture as dominant economic drivers.

The need for rural communities to approach development from a wider perspective has created more focus on a broad range of development goals rather than merely creating incentive for agricultural or resource-based businesses. Education, entrepreneurship, physical infrastructure, and social infrastructure all play an important role in developing rural regions. Rural development is also characterized by its emphasis on locally produced economic development strategies. In contrast to urban regions, which have many similarities, rural areas are highly distinctive from one another. For this reason, there are a large variety of rural development approaches used globally.

Rural development is a comprehensive term. It essentially focuses on action for the development of areas outside the mainstream urban economic system.

Rural development is a complete term that concentrates on the action taken for the development of rural areas improve the village economy. However, few areas that demand more focused attention and new initiatives are.

• Public Health and Sanitation
• Women Empowerment
• Education
• Employment opportunity
• Infrastructure Development (e.g. electricity, irrigation, etc.)
• Facilities for agriculture extension and research
• Availability of Credit

The concept of rural development can be analysed as follows:

• It ensures the increased ability of the poor rural mass to have control over their environment and resources rather than being passive object of external control and manipulations.
• It is a process of building capacities of rural people. The capacity may be build up in all aspects of life which includes socio-economic, cultural, educational and political.
• It also ensures the participation of rural people in all developmental activities. There is an increasing concern all over the world that the poor, the needy, the unprivileged, the weaker section of the society should take active part in development process, so that, they can fully enjoy the benefits of development.

Basic Elements of Rural Development:

Self-Respect:

Every person and every nation seeks some basic form of self-respect, dignity and honour. Absence or denial of self-esteem indicates a lack of development initiatives.

Life-Sustenance:

In order to survive, people have certain basic needs. These basic necessities include food, shelter and clothing. Besides, health care facilities and security are also important needs. Providing these basic necessities to all the people is of vital importance for economic growth, which is a prerequisite for development.

Freedom:

Freedom not only refers to political or ideological freedom, but also freedom from ignorance and superstitions. Man should be free from all bondages and should live in harmony with nature.

Important approaches of rural development taken up in India:

• Community Development Programme:

The community development programme initiated in the year 1952 made an attempt to increase involvement of rural people in development process. It laid emphasis on building of infrastructure in rural areas with the active involvement of people through organizational set up of National Extension Services.

• Rural Development Projects and Programmes:

Rural development projects are micro level efforts to bring about desirable changes in rural areas. However, rural development programmes involve a large number of projects which are aligned to one another, so that; they affect various facts of rural economic and social life. Rural development programmes attempt to bring about changes in a wider areas affecting large number of people.

• Package Approach:

In order to increase agricultural production per se in the country, this approach was adopted. Popularly known as package programme, emphasis was given on application of all improved practices, such as seeds, fertilizers, irrigation, plant protection measures and use of improved agricultural implements. The programme like Intensive Agricultural District Programme (IADP), Intensive Agricultural Area Programme (IAAP), High Yielding Varieties Programme (HYVP) are good example of such approach.

• Target Approach:

The poor, unprivileged section of the society deprived of the benefits from package programme, were selected under this approach. The Small Farmers Development Agency (SFDA), Marginal Farmers and Agricultural Labourers (MFAL) were some of the programmes under this approach.

• Integrated Rural Development:

There is a fair amount of disagreement among the rural development experts in defining the concept of Integrated Rural Development. The rural economy and social structure in most of the developing countries is characterised by widespread poverty, poor health conditions, illiteracy, exploitation, inequitable distribution of land and other assets and lack of rural infrastructure and public utility. Therefore, the problem requires an approach that will take into account all these factors in devising a comprehensive strategy to foster development in rural areas.

• Area Approach:

In this approach, specific areas were targeted for development initiatives. The areas which needs specific attention for certain problems to tackle were selected in this approach. The Drought Prone Area Programme (DPAP), Command Area Development Programme (CADP) are some of the major initiatives under this approach.

• Grass Root Level Approach or Local Level Participation in Rural Development:

There is a paradigm shift of approach in rural development in recent times. The efforts are more people-centric and situation specific. It is because of the fact that the problem of the rural areas varies with the situation to situation and problems need to be solved locally using available resources. Hence, ensuring people’s participation in all development efforts is becoming a prerequisite for any rural development initiative.