Spending
Rural consumers buying more durables due to higher affordability

According to CRISIL, even though higher income is a necessary factor, it is not the sole factor, influencing purchase decision for durables in rural households

Rise in discretionary spending and the low level of price rise in consumer durables have resulted in higher affordability of these articles for rural households, reports PTI quoting a CRISIL research.

 

According to a report from ratings agency CRISIL, consumer durables have become more affordable to rural households in recent years, due to rising discretionary spending and relatively low levels of price rise in durables.
 

It also states that at least one in every two rural households owned a bicycle, an electric fan and/or a mobile phone in 2009-10.

 

The report, however, points out that the penetration pattern of consumer durables varies distinctly in rural areas, “clearly indicating that even though higher income is a necessary factor, it is not the sole factor, influencing purchase decision for durables.”
 

The report says discretionary spending grew to Rs24,000 in 2009-10 from Rs14,000 in 2004-05, a growth of over 11% annually, which was higher than inflation that rose about 6% per year over the same period.

 

While Kerala and Punjab are at the top spots in terms of the highest discretionary rural household spending, it grew higher than the national average in Maharashtra, Bihar, Gujarat and Madhya Pradesh.

 

The report also notes that discretionary rural household spending grew at lowest rates in Andhra, Bengal and Karnataka.

 

On the availability of electricity and its impact on some of consumer durables, the report says access to electricity will play a major role in expanding penetration of these goods.

The report said, “In future, while rural households in relatively poorer states could enjoy higher affordability levels towards purchase of consumer durables, improving access to electricity will play a more critical role in expanding penetration of these goods.”

 

It said this will especially hold true for Bihar, Bengal and Uttar Pradesh.

 

According to CRISIL estimates nearly 12 million additional rural households in Uttar Pradesh and 4 million more in rural Bihar would have owned electric fans by 2009-10, had there been better access to electricity. Further, each of these two states would have had 5 million more households owning a television set.

 

In contrast to the relatively poor electricity access, an improvement in road connectivity between 2004-05 and 2009-10 appears to have resulted in a sharp pick-up in ownership of two-wheelers in several states including Bihar, Orissa and Rajasthan. Therefore, apart from raising rural incomes, boosting rural infrastructure will help unlock the true demand potential for consumer durables, CRISIL said.

“While several factors, including availability of finance determine penetration of two-wheelers and cars in rural areas, an improvement in rural road network could enhance demand for these items,” it stated.

 

Better connectivity through the Prime Minister's Rural Roads Scheme appears to have positive impact on auto sales, it added.

 

The report adds that apart from raising rural incomes, boosting rural infrastructure will help unlock higher demand.

 

“In times to come, in addition to higher incomes, improved access to electricity and roads will be key determinants of demand for consumer durables in rural areas across many states,” the report says.

Rural households in richer states such as Kerala and Punjab are likely to move further up the ladder and purchase more high-end durables goods, such as refrigerators, ACs, four-wheelers and digital cameras in future, it added.

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Taliban threaten to target Indians to avenge Kasab's hanging

Following the threat from Taliban, security measures at the Indian High Commission in Islamabad, which are already very extensive, had been further tightened after the Taliban threat

 
Islamabad: Pakistani Taliban on Thursday threatened to target Indians "anywhere" in retaliation for the execution of Ajmal Kasab and demanded that India should return the body of the Lashkar-e-Taiba (LeT) militant involved in the 2008 Mumbai attacks to his family, reports PTI.
 
In calls made to journalists in northwest Pakistan, Tehrik-e-Taliban Pakistan spokesman Ihsanullah Ihsan said his group would target Indians and Indian interests "anywhere" to avenge the hanging of Kasab.
 
Ihsan further said Indian authorities should hand over Kasab's body to his family or to the Taliban.
 
He warned the Taliban would "capture Indians" and "not return their bodies" if Kasab's body was not handed over.
 
25-year-old Kasab, who belonged to Pakistan's most populous province of Punjab, was executed in a Pune jail in the western Indian state of Maharashtra on Wednesday.
 
His body was buried within the prison.
 
The Pakistan government reacted cautiously to the hanging, with the Foreign Office spokesman saying Islamabad was against all forms of terrorism and would cooperate with countries in the region to tackle the menace.
 
Kasab was the only surviving member of a 10-member team of LeT terrorists who killed 166 people during a three-day rampage in Mumbai nearly four years ago.
 
Diplomatic sources said security measures at the Indian High Commission, which are already very extensive, had been further tightened after the Taliban threat. 
 
Indian diplomats in Pakistan have faced threats in the past too.
 
In 2010, two deserters from a paramilitary force arrested for terror links had revealed that militants aligned with the Pakistani Taliban had plans to abduct Indian diplomats and target foreign missions.
 
The men had revealed that militant groups had plans to kidnap Indian diplomats, including the High Commissioner, to exchange them for militant commanders being held by Pakistani authorities.
 
At that time too, security had been tightened for Indian diplomats and their families.
 
on Wednesday, an unnamed LeT commander was quoted by media as saying that the group regarded Kasab as a hero who would inspire more terror attacks.
 
Ihsan was quoted by the Pakistani media on Wednesday as saying that the Taliban were shocked by Kasab's hanging.
 

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SC issues notice to two companies on Subramanian Swamy's plea

The apex court, however, refused to issue notice to Finance Minister P Chidambaram and his son Karti Chidambaram who allegedly has majority stake in the companies

New Delhi: The Supreme Court on Thursday issued notices to Chennai-based Advantage Strategic Consulting Private Ltd and its offshore sister concern on a plea of Janata Party President Subramanian Swamy seeking initiation of contempt proceedings against them for filing a defamation suit in Singapore against him, reports PTI.

 

"We will issue notices to two companies to seek their responses... returnable within 12 weeks," a bench of justices GS Singhvi and KS Radhakrishnan said, moments after Swamy rose to advance his arguments on his contempt petition.

 

The bench, however, refused to issue notice to Finance Minister P Chidambaram and his son Karti Chidambaram who allegedly has majority stake in the companies.

 

Swamy filed contempt plea against the companies, including Advantage Strategic Singapore, which had had filed the defamation suit against the Swamy for allegedly defaming them in judicial proceedings related to 2G spectrum allocation scam case.

 

He said the companies had intentionally filed suits abroad to harass him and to make him run around the world.

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