Page 51 - MARKETING & PUBLIC RELATIONS EBOOK IC88

CHAPTER-8

RURAL MARKETS

CHAPTER INTRODUCTION

The rural areas, comprising of more than 6 lakhs villages and about 70% of the population had been
neglected in the past by insurance companies. It cannot x ignored any more. There are significant
developmental activities happening the rural areas. This chapter attempts to provide a picture of what is
happening in the rural areas.

LEARNING OUTCOMES

A. The Rural Sector
B. Economic Growth
C. Infrastructure
D. Development Programmes
E. Structure of the Rural Markets
F. Insurance is Rural Areas

A. THE RURAL SECTOR

a) General

1. Ever since the nationalisation of insurance (life in 1956 and non-life in 1973), there has been a
thrust towards developing the rural market for insurance. Apart from the fact that about 70% of
the people live in rural areas, the rural economy was vital for the country.

2. The insurers in the public sector had done much to develop the markets, both in terms of
infrastructure and appropriate covers. The Insurance Act and the IRDA regulations provide that
all insurers must transact a certain minimum business in the rural areas.

3. The rural area is defined by the IRDA as a place in which the population does not exceed 5000,
as per the last census, the density of population is not more than 400 per square kilometer and
at least 75% of the male working population is engaged in agriculture. This is the criteria
followed by the census in identifying villages.

4. As per the census of 2011, 68.84 % of the people, totaling 83.3 crores, stayed in the 6,40,867
villages and the remaining 31.16%, totaling 37.7 crores, stayed in the 15,870 urban areas,
consisting of small and big towns. There are 2.56 lakh gram panchayats, which are units of self
governance representing one or a cluster of two or three villages.

(b) Profile of the Rural Sector

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