'In past 2 years, both God and govt have failed rural India'

Moneycontrol BureauThe weak results announced by Hindustan Unilever earlier this week indicated that the stress in the rural economy continues to persist even as analysts hope a strong monsoon this year turns things around.The widely-propounded theory behind the rural slowdown is that it was caused by the back-to-back drought years in 2014 and 2015 but renowned consumer economy expert Rama Bijapurkar says there is a second culprit too."Both gods and the government have not been kind to rural India," she said, lending credence to a belief that even the NDA government had gone light on its rural stimulus.She added that a turnaround may finally be under way and that pick-up in the rural economy could take place by October-November period.But she said the larger question is that if there is disparity between the growth rates of rural and urban segments, have consumer companies really focused on the latter?She maintained that the richer segments of the country were actually under-served and companies would do well to have a portfolio that caters to it but even here, even as she said that an opportunity continues to exist in the unexplored hinterlands of rural India. ("Go where no one has gone before".)To that extent, she said Patanjali was doing a good job in creating new markets. "Patanjali is telling the consumer: 'I am offering you different-but-better for cheaper and so adding more value'."But to sum up, she said even such a strategy had its limits. "How many more times are you going to have a bath if you have an interesting soap," she asked. "What I am suggesting to you is that perhaps FMCG is now lot less exciting as a space compared to other spaces."Wouldn't the government's Seventh Pay Commission hikes help in kick-starting consumer sentiment, thereby benefiting FMCG companies?She said there was little direct correlation between macro indicators and companies' performance."Even so, just because in the 90s, higher [government employee] incomes got spent on durables doesn't mean it will again be spent on them," she said. "Consumer choices are dependent on time. Maybe this time they will go into mutual funds and financial services given that real estate is not a good place to be."