Rural Distribution
Rural Distribution – An Introduction
Rural distribution involves creating, organizing, pricing, and distributing products and services to ensure that rural residents have access to essentials at reasonable costs.
Over 3.2 million square kilometers, 610,000 villages make up rural India. With 41% of India's middle class and 58% of the nation's total disposable income, the 700 million Indians who live in these villages make up a sizable consumer class.
Because of a lack of last-mile connectivity, the 128 million households present a significant opportunity for the rural distribution of goods and services that are now unavailable.
However, there is some problem of rural distribution because of the below mentioned factors –
- Lack of proper lines of communication, such as telephone facilities and postal services, makes it difficult for marketers or service providers to
distribute goods and services because of a lack of infrastructures such as roads, bridges, and other means of transport. - Retailers need to put a product order.
- For marketers, storing goods in rural locations presents another challenge.
- Multiple tiers increase costs, and channel management is a significant issue for marketing because of the many middlemen in the chain.
- The presence of middlemen or brokers in the marketing process
- Poor viability of outlets in rural areas
- Rural outlets cannot get proper banking support in order to remit their cash or replenish supplies, facilitate finance, and receive goods because of insufficient banking facilities.
Rural Distribution in India
Rural Distribution in India – What is its roles
The creation of a network of rural distribution in India to provide access to products and services in rural India has a sizable industry worth US$153 billion.
Increased funding for rural development and the National Rural Employment Guarantee Scheme (NREGS), which is facilitating a greater flow of funds into rural India, are two important policy measures taken by the Indian government.
An increase in creating village-based micro-businesses, which will boost the local economy, aid in village capital building is the need of the hour.
As per the experts of FIA Global – a leading business correspondent services provider, more and more village-based micro-businesses when established will boost the local economy and help in the formation of capital in villages.
Rural distribution in India is being facilitated by both central and state governments through the Digital India Program. The "Digital India" program's main objective is to make rural areas stronger digitally and resource-oriented.
For instance, Aadhaar is a unique biometric identification facilitating rural distribution. As part of the Indian government's rural distribution programme, Jan Dhan savings bank accounts, direct social benefit payments, and the BHIM digital payment infrastructure are some of the other initiatives.
Now farmers can access useful information on the weather for the day and the following five days, can have access to market rates, contact with dealers, agricultural scientists, or experts for gaining knowledge about their agricultural produce using the "Kisan Suvidha" app. Such programs initiated under the rural distribution has led to an increase in getting various types of banking services from 54% in 2014 to 80% in 2018.
The government and private sector initiatives are making tremendous strides toward digitising rural India, but they are only reaching a small portion of the population.
Governments, regulatory authorities, financial service providers, and fintech companies must work together to fully realize the potential of a digital rural India as smartphone adoption and mobile data usage increase in rural India.
