INTRODUCTION

It is frequently said that if you can put up for sale a product from corner to corner the length

and breadth of India, you can without difficulty sell it in any fraction of the world. To a

certain extent due to the inconceivable diversity of the nation and somewhat due to a

enormous split between its countryside and city areas, selling and marketing have been the

most overwhelming tasks in this part of the world. The task becomes even more difficult,

when it comes to tapping the rural consumer. Often, managers of the marketing department

are trapped off guard in the rural heartland. And, the problems faced by them are ample —

lack of understanding of the customer’s mindset, inadequate distribution network, lack of

infrastructure. Occasionally, the problem is due to the misconceived ideas the companies

have about rural customer. “Marketers in India have the mentality that ‘rural is a niche

market’. Traditionally, companies have been pegging rural market as difficult to sell —

which should not be the case,” says Anurag Gupta, president - strategic initiatives &

integration, TERRA, Mudra Group. The thought of a rural consumer gets indistinct by

images which trim down such customers to a meagre set of numbers. Just like the other

consumer, the rural consumer too has ambitions and needs and the human viewpoint is often

ignored by experts. 

WHO IS A RURAL CONSUMER?

The Consumer Protection Act, 1986 defines a consumer as:

1. One who buys goods or hires services for consideration.

2. One who uses the goods or hired services with the approval of the buyer or hirer of

the service.

3. One who uses the goods/services to earn livelihood by self-employment.

A consumer can be a consumer for goods or consumer for services. A consumer is one who

buys some goods for consideration for his use or one who uses such goods with approval of

such buyer. The buyer who buys goods and uses the same for commercial purpose cannot

claim protection under the Act. But a consumer of services even if he utilises it for

commercial purpose can be safeguarded by the act. India being primarily a rural country with

lakhs of villages has a vast consumer base in the villages. The people consuming goods and

benefiting from the services in the villages i.e. rural areas are the ‘rural consumers’.

NATURE OF RURAL CONSUMERS.

First, rural India isn’t a single homogenous block; it is heterogeneous. In fact, the label Rural

India is a catch-all phrase to describe many disparate parts in many stages of development,

driven by many different forces. The rural parts of Uttarakhand, Gujarat and Bihar are all

different in character. It is often said that if you can sell a product across the length and

breadth of India, you can easily sell it in any part of the world. Partly due to the unimaginable

diversity of the country and partly due to a great divide between its rural and urban areas,

selling and marketing have been the most daunting tasks in this part of the world. The task is

even more uphill, when it comes to tapping the rural customer.

Second, rural India is made up of all kind of occupations. The rural consumer could be a bank

clerk commuting to the nearest town or an agricultural labourer in a thatched-roof hut.

Third, with road connectivity so widespread, the notion that rural Indians are stuck in the

inter-land, and unexposed to the developments around them, simply isn’t true anymore.

Children and women commute farther for their schools and for their shopping, respectively.

Fourth, rural Indians have small and compact families, just like urban India. According to the

National Council of Applied Economic Research (NCAER) data, the average rural family has

5.08 persons; the average urban family, 4.81 persons.

Fifth, while rural India is exposed to all new things urban, it still has a low level of traditional

education, making rural Indians different kind of consumers. 26% of rural India’s chief wage

earners (CWEs) are illiterate compared with 8% in urban India. 7% of rural CWEs are

graduates compared with 29% in urban India.

Finally, there’s the issue of income. Rural India has an average per capita income that is half

that or urban India. Extrapolating from income data from NCAER, we know that 21.7% of

the rural population is below the poverty line; for urban populations, the incidence of poverty

is 20.8%, not much lower.

EFFECT OF GLOBALISATION AND LIBERALISATION ON THE CONSUMERS.

The process of development joined with escalating liberalization and globalisation from

corner to corner of the nation has facilitated consumers to understand their progressively

more important function in governance and society. The consumer pressure group in India is

as old as trade and commerce. It is to be noted that in the Kautilya’s Arthashastra, there are

mentions to the notion of consumer protection against exploitation by the trade and industry,

adulteration punishment for these offences and short weight-ment and measures. In a

developing country like India, the level of literacy is very low; the people face a number of

problems, particularly in the background of consumer related issues. Ensuring consumer

welfare is the responsibility of the state. Accepting this, policies have been framed and the

Consumer Protection Act, 1986 was introduced. Recently Consumer Protection Amendment

Bill 2010 has been introduced in the Parliament. A detached Department of Consumer Affairs

was also created in the Central and State Governments to exclusively focus on ensuring the

rights of consumers as enshrined in the Act.

FACTORS WHICH LED TO CHANGE IN THE DEMOGRAPHY OF A RURAL

CONSUMER.

1. With the growth in the service sector people from rural areas started to work in

nearest town which led to people being aware about consumerism. Growth of public

sector indeed led to the change in the demography of the country.

2. Commercialisation of Farming is also one of the reasons which led to demographic

change of a rural consumer.

3. Expansion of administrative and commercial services in rural areas which led to

consumer awareness among the inhabitants of the villages.

PROBLEMS FACED BY RURAL CONSUMERS.

1. Adulteration

Adulteration is one of the most grievous problems faced by the rural consumers. The

sellers mix items such as rice with kankars, milk with water, cottage cheese with

soybean paneer, adulteration of asafoetida etc. And the list is endless. Since the rural

consumers are uneducated they are not aware about the rights which they have against

the sellers as a result they end up taking the adulterated products.

2. Short weighing and measuring.

Sellers at villages take advantage of the illiteracy of the rural consumers and use

inappropriate weights and measures in order to gain wrongful profit. Instances such as

disfigured tin oil bottles to decrease the volume of oil are most common in most of the

villages. The other techniques being the use of magnets, locally made weights which

are not approved and even the use of stone weights. These practices put the rural

consumers in great threat.

3. Lack of Safety and quality in appliances and equipments.

Since the rural consumers are not aware about their rights they are provided with

materials which are substandard. Selling of expired medicines and food items is a

practice which is being followed in villages since time immemorial. Also the products

which are rejected in the urban markets are sent to the rural markets.

4. Unfair warranties and guarantees.

The non-educated background of the rural consumers is of great help to the sellers.

They sell sub-standard items to the rural consumers and the warranty and guarantee

associated with those products is hardly given and if given it is for a very small period

of time. For instance, electrical appliances such has table-fan are available in the

market with a guarantee ranging from 6-12 months, however the same table fan is

available to the rural consumer at a guarantee of a period ranging from 15-20 days (if

at all they are provided with guarantee).

5. Imitation and Sales Gimmick.

Imitation of branded items is also a serious problems faced by the rural consumers.

Names resembling branded and famous products are introduced in the market and are

subsequently purchased by the rural consumers. E.g. toothpaste bearing the name

“colagate” is available in almost 45 per cent of the villages in Uttar Pradesh, rural

consumers purchase in under the impression that they are purchasing the brand

Colgate. Also in-order to sell expired products various schemes are offered to the

rural consumers wherein due to their low income they are compelled to purchase even

the substandard and expired products.

6. Unreasonable pricing.

Rural consumers are sold items at a price moastly above the marked price siting

various reasons. The practice is common during shortages when a mock bidding type

of atmosphere is there, where person quting the maximum price is given the particular

commodity. During Festive seasons the prices of sweets, oil, etc touch rocket high in

the villages. For instance, during Diwali the mustard oil which is available at a rate of

68 per litre is sold at about 100 per litre.

In the recent years the living standard of the rural consumer has improved. The chief reasons

being : (i) Schemes relating to employment guarantee, and (ii) the increase in the minimum

support prices of important crops. There are instances in which the rural consumer is as

prosperous as the consumers in the urban areas. For a case in point, the per capita income of

top 20-30 per cent rural section is not much dissimilar from the urban middle class. This

suggests that the affordability of the consumers will be more or less the same in both the

markets i.e. rural and urban, and the marketers can spout that rich consumer in the rural area

for a particular product in a similar way as he targets/is targeting the middle class urban

consumer.

There are others problems also which are faced by the rural consumers but if we keep on

enumerating them the list will be endless. It is mainly due to the above mentioned problems

and the implicit problems faced by the consumers in the villages that a legislation is required

which should concentrate on the rural consumers. Keeping in mind the above problems a Bill

was introduced in the Parliament, namely, The Consumer Protection Amendment Bill, 2010

to cater to the needs of the rural consumers.