Owing to private and government sector improvements, India’s rural economy is growing steadily. India’s rural economy adds to almost half the GDP of the nation.
How Disruptive Business Models in Agriculture and Finance are Stimulating the Economy
In this episode, we will focus on various innovations and disruptive business models that are contributing to rural finance and agriculture.
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Owing to private and government sector improvements, India’s rural economy is growing steadily. India’s rural economy adds to almost half the GDP of the nation.
India’s rural ecosystem is extremely large and is growing significantly. In 2019-2020, the rural economy was singularly responsible for employing 350 million people—68 percent of the total workforce.
Various government policies, such as the Model contract farming Act of 2018, have boosted FPOs (farmer-producer organizations). FPOs are growing in importance since they assist farmers in generating awareness and creating new opportunities.
An article published on Brain & Company mentions and I quote: “Agriculture is the largest sub-sector in the rural economy, contributing approximately 37% of total rural GDP in 2019–20. Between 2017 and 2020, agri-tech start-ups have attracted ~INR 6.6K Cr in private equity investments.”
“As newer generations of farmers and FPOs become digitally savvy, new business models are emerging across the agriculture value chain, from inputs and harvesting to processing and distribution. Information and transparency initiatives are addressing existing inefficiencies and formalising a traditionally informal sector…,” the article further states.
In addition to various agricultural reforms, digital inclusion has made rural India a force to reckon with. From Aadhar to Prime Minister Jan Dhan Yojna, the digital revolution has significantly raised the living standards of rural India.
Another contributing factor to the development of rural India is the availability of credit and lower-value loans.
“…Awareness and access to credit options are increasing as more rural- and agriculture-focused players, like Jai Kisan and Samunnati, connect farmers to financing partners. Additionally, government schemes like the Agriculture Infrastructure Fund and Pradhan Mantri MUDRA Yojana (PMMY) are offering low-interest loans to farmers and FPOs as well as to non-corporate, non-farm, small and micro enterprises to drive financial inclusion,” reads the Brain & Company article.
Rural India is truly contributing to building the nation. While Urban India is doing its bit in contributing to the growing economy, the government and the private sector have realized the importance of rural India. If India is to become the Viswa Guru, it has to begin by making rural India a formidable force.
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