Rural India consumption growth surpasses urban areas: CRISIL

Rural India consumption growth surpasses urban areas: CRISILConsumption in rural India is growing at a faster pace than in urban areas, thanks to an increase in household incomes, a fresh report by credit rating agency CRISIL said.

The CRISIL report says that residents of rural India additionally spent Rs. 3,750 billion between 2009-10 and 2011-12, while additional spending by urbanites was Rs. 2,994 billion during the same period.

As India's rural population is larger in size than urban population, the value of goods & services consumed in rural India has always been greater than in urban India, but the differential narrowed during most of the last decade as rural economy grew at a faster pace.

The report attributed the increase in consumption in rural India to growing non-farm employment opportunities.

CRISIL Managing Director Roopa Kudva said, "Underpinning this growth in rural consumption is a strong increase in rural incomes due to rising non-farm employment opportunities and the government's rural focus through employment generation schemes."

As per figures released by NNSPO (National Sample Survey Organisation), rural construction jobs jumped by 88 per cent between 2004-05 and 2009-10, while the number of people occupied in agriculture slipped from 249 million to 229 million.

A significant phenomenon in rural consumption is a budge from necessities to optional goods. Around 14 per cent of rural households owned a two-wheeler in 2009-10, twice that in 2004-05. Likewise, around 42 per cent of rural households had a television in 2009-10, up from 26 per cent five years earlier.