Rural India Outpaces Urban Spending By The Widest Margin In Five Years

Growth in consumption in rural areas of the country has outpaced spending in urban India by the widest margin in the last five years, Mint has reported.

According to the report, based on the findings made by market research firm Nielsen, consumption in rural areas grew 9.7 per cent in the last fiscal year. In comparison, urban spending grew by 8.6 per cent. Rural spending had outpaced urban growth last year by less than half a percentage point.

“If we look at growth in volume terms, we have reached the peaks last seen five years ago. Volumes were growing at about 10 per cent then,” executive director of Nielsen India, Sameer Shukla, was quoted by the daily as saying.

According to the firm’s data, sales of Fast-Moving Consumer Goods (FMCG) grew at 13.5 per cent, the fastest pace in three years, in the last fiscal. This is good news for the FMCG industry as revenue from rural areas forms 40 to 50 per cent of the total.

According to analysts, rural revenue for the FMCG industry is likely to grow by 15 to 16 per cent in the current fiscal year. Growth from urban areas, however, is expected to remain steady, an expert said.