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Small towns closing gap with cities in spending

From a sleepy town half-a-decade ago, Rudrapur in Uttarakhand today has vibes unfamiliar of a small town. The town has grown by leaps and bounds in the last five years thanks to State Infrastructure and Industrial Development Corporation of Uttaranchal (SIDCUL) to promote industrial development in the State.

business Updated: Dec 26, 2011 01:47 IST
Rachit Vats

From a sleepy town half-a-decade ago, Rudrapur in Uttarakhand today has vibes unfamiliar of a small town. The town has grown by leaps and bounds in the last five years thanks to State Infrastructure and Industrial Development Corporation of Uttaranchal (SIDCUL) to promote industrial development in the State.

Apart from Rudrapur, other small towns namely Ahmednagar (Maharashtra), Vapi (Gujarat), and scores of other small regions, juxtaposed between the urban cities and villages are slowly changing the landscape and are said to hold the key to India’s economic future.

"Tier-IV is no longer a poverty market as small towns are catching up with urban centers in terms of disposable income and consumption," said Kirti Prasanna Mishra, partner, MART, pioneers in rural market research. http://www.hindustantimes.com/Images/HTEditImages/Images/26-12-buss-4.jpg

As per the MART estimates, the share of Tier-IV towns is going up every year and at present in percentage terms, the total share of the disposable income — Tier-IV towns’ contribution is 39% which is equal to the contribution of the Tier I cities.

"There has been an exponential growth in the quantum of growth in the small towns over the last few years. Towns such as Rudrapur alone have seen a ten times growth in areas of retail, education, healthcare and all other sectors you can possibly think of," said Mishra.

MART estimates claims there are a total of 5,127 small towns representing more than 50% share of households. Of this 8% of India's population lives in Tier-I cities (8 cities) while 4% lives in Tier-II cities (26 mainstream cities), 7% in the Tier-III cities (33 cities), and 11% in the Tier-IV towns (5,094 towns). The rest 70% is the rural population residing in the 6,38,000 villages across India.