In the first half of this calendar year, the volume of household consumption of FMCG products in rural areas grew 5.5 per cent over the same period a year ago. By comparison, the rate of growth in urban India was 2.6 per cent, show data sourced from market research agency IMRB, which tracks household consumption across 79,400 homes in both urban and rural India.

Interestingly, the sharp recovery seen in rural consumption is not only in comparison with urban areas but also against the year-ago period. The rate of growth in rural household consumption had declined 4.2 per cent in January-June 2014. Urban consumption growth in volume terms in the first half of that year, on the other hand, had been 6.1 per cent, implying there have been clear signs of a slowdown in urban areas this year.

"Urban consumption growth in the first half is less than half of what it was last year," says Vinay Khamkar, group business director, IMRB Kantar Worldpanel. "But there is a reason for this. Rural India has reacted faster to a deflationary trend seen in prices, so the pick-up in consumption this year has been sharp in those areas. Rural incomes typically are unstable, and react quickly to external stimuli. When inflationary trends persist, an effect is visible in rural consumption. Similarly, deflationary trends also have an equal impact on consumption in rural areas."

While a low base of last year has played a part in the sharp rural recovery this year, analysts say that still does not take away much from the uptick in consumption. Marico Managing Director & Chief executive Saugata Gupta says: "Rural consumption has not declined; it is urban consumption that has been affected. If there is any slowdown rural areas have felt, it is in discretionary categories like automobile and durables, and not items of daily consumption."

Gupta's point is becomes clearer when we take a deeper look at rural household consumption across categories. For instance, volume growth in personal-care category was 3.7 per cent, compared with 1.1 per cent in urban India. Similarly, rural volume growth in household care was 4.2 per cent, against 1.9 per cent in urban areas. And, the food & beverages category saw volume growth of 5.8 per cent in rural areas, versus 2.7 per cent in urban.