Rural India a potential $500-bn market: Survey

India Inc was urged today to invest in rural India, which according to a McKinsey survey, will provide a market worth $500-600 billion by 2020.

At a CII annual session, Bharat Nirman, the government's design for rural infrastructure development, was the subject of a presentation by McKinsey CEO Adil Zainulbhai, who made a strong case for increased investment in rural areas.

Zainulbhai said homogenisation of rural and urban elite was incorrect and provided a four-fold classification for rural areas. Of the 593 rural districts that the McKinsey survey looked at, 67 were classified as urban cousins, 118 as those close to rural economic centres, around 160 as able districts with a basic minimum infrastructure and 248 districts as deprived.

"We have been able to establish a direct correlation between basic infrastructure and growth drivers; areas which have minimum infrastructure have up to 30 per cent more per capita income than deprived districts," said Zainulbhai. "Bharat Nirman is on the right track," he added.

"To make the leap from poverty to prosperity we have to provide infrastructure plus enterprise. This is where industry comes in. The rewards for industry are also big; with a few minor changes in supply chains, we are looking at sectors like fruit and vegetable retail and textiles as Rs 50,000 crore industries," he said.

Minister for Food Processing Subhodh Kant Sahay assured industry that the government was committed to providing infrastructure. "We will provide infrastructure but the industry has to provide economic activity," he said.