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Inflation forcing rural India to buy fewer essentials items: Report


Rural India is purchasing fewer daily use items, as a result of inflation’s impact on household budgets, a report said.


Released on Thursday, the Rural Barometer Report by research firm Kantar and GroupM’s Dialogue Factory, showed that the monthly purchases of essential items have decreased by 5 per cent in rural markets between December 2021 and July 2022. These essential goods include cooking oils, laundry products, biscuits, and chocolates, as well as personal hygiene products.


The survey stated that more rural customers are choosing to buy small packs of brands across all product categories to maintain household budgets than switching to cheaper brands.


The report that surveyed over 4,000 rural consumers aged between 18 to 55 years, said that as much as 70 per cent of the participants raised concerns about inflation and its impact on their finance.


Both skilled and unskilled workers as well as small business owners, such as traders and shopkeepers, were among those who reported to worry about their finances. Although individuals involved in agriculture were less anxious about their financial status, they were less optimistic about the nation’s economic health, it added.


In August, a survey by NielsenIQ reported that the demand for fast-moving consumer goods (FMCG) products in rural areas of India was lower than in urban areas between April and June as volumes went down 2.4 per cent.


Earlier in September, FMCG company Wipro Consumer Care, the maker of Santoor soaps, had acknowledged that the demand for compact packs was greater in rural than in urban markets. The company warned decline in demand in states with lower-than-average-monsoon, such as Bihar, Uttar Pradesh and Bengal, even though September quarter witnessed an increase while inflation began to stabilise.


According to the Rural Barometer survey, northern India and West Bengal expressed less faith in the economy than those in the south, with the exception of Karnataka. However, Tamil Nadu, Andhra Pradesh and Telangana had more confidence in the economy.


Consumer confidence began to decline in the first half of 2022 as a result of inflation concerns, according to Dalveer Singh, head of experiential marketing for Asia-Pacific at Dialogue Factory.


The survey respondents said that while monthly household spending increased by 8 per cent, monthly household income increased by 12 per cent, during the same period which is helping to counter inflation. Two out of every three rural Indian households were concerned about inflation, according to Puneet Avasthi, senior executive director, specialised companies, insights division, Kantar. But, he added that due to increase in household earnings, there has been stability.



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