Waiting at the bottom of a pyramid
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Waiting at the bottom of a pyramid

Touted by many as the next exciting challenge, the rural market seems as much a mystery as a myth, writes Rajiv Aggarwal.

india Updated: Apr 14, 2013 22:46 IST

India’s youth, who constitute more than 50% of the total population, have been the subject of discussion in various fora dealing with topics as diverse as economic growth, employment, market size, education, health and so on.

Interestingly, the rural economy continues to be an enigma. More than seven years after the term was popularised by CK Prahalad, ‘bottom of the pyramid’ remains an exciting challenge and much like El Dorado continues to attract gold diggers, many of whom will vouch that it is more a myth than a reality.

The industry, however, continues to view this opportunity with some suspicion but the government, perhaps out of political compulsions, continues to roll out schemes pushing money into rural India for the benefit of more than 700 million Indians.

Under immense pressure from the Reserve Bank of India, banks have allocated significant resources and introduced the business correspondent model, which met with limited success.

The Unique Identification Authority of India (UIDAI) suggests that it is the one scheme that will integrate various government schemes with a common thread that will lead to a boom.

The government’s belief that a large network of banks, one savings account for every family and direct transfer of cash benefits may be just another casualty in a long history of multiple failures to reach out to the poor masses.

So then why is the industry shy of committing to such a huge opportunity? Why have the government schemes, such as MGNREGA and financial inclusion, met with limited success?

Is it perhaps only a myth or is there really a market with potential that justifies investments of such scale?

Based on my experience and discussions with others working on rural initiatives, the ‘bottom of the pyramid’ is more of a mystery than a myth and I say this purely from an Indian perspective.

The key to unravelling this mystery is the minds of our rural citizens, their aspirations, desires and most of all an awareness of the latent potential that lies buried deep in our villages which must be cajoled to the surface.

It is obvious that plans conceived in New Delhi focus more on the government’s need to justify its role as service provider rather than address the needs of the citizen.

The industry too has been designing business models based on theories that claim to accurately predict demand patterns in rural India or sometimes under pressure to comply with government regulations invest in half measures.

Most strategies are built in cities with little or no understanding of what drives life in a village, leading to fundamental errors.

Talk to the youth in our villages and you hear a tremendous diversity in views on life, expectations, ambitions and also some confusion.

Many do not have enough money and do not feel the need for a bank account but most believe that given an opportunity they can change their economic status.

They are keen to learn of available options and are willing to take risks; most are ignorant of various government initiatives but are clear in their desire for white-collar jobs.

Isaac Asimov stated that “the only constant is change” but in India the story gets more complex because the constant is itself changing rapidly.

Thirty years ago, the industry would take years to launch a new design or product, now it takes a few months and, therefore, schemes/businesses focused on rural India must be designed to integrate the phenomena of continuous change in behavioural patterns.

The government’s role must be limited to policy, rules and regulation, with a mandatory shift from the traditional concept of subsidies, penalties and revenue support.

The government must understand its role as an agent of change and create awareness in rural India about the opportunities that could change our destiny.

The industry must be left to manage investment, engagement models and operations.

To be a part of this extraordinary revolution, we must first step into the hearts of those we intend to work with and benefit from.

Rajiv Aggarwal is CEO, Bharat Technical Solutions Private Limited
The views expressed by the author are personal

First Published: Apr 14, 2013 22:44 IST