Time for SCM companies to go rural

Thanks to the budget presented by the finance ministry, the rural sector is going to see tremendous growth in the months to come and thereby create opportunities for Supply Chain Companies

The rural demand for the urban products and rural production (particularly agriculture and allied sectors) are going to witness good growth in near future due the support of the finance ministry for the rural sector. According to the budget, Indian Agriculture Sector which was growing with merely 1.5 percent will achieve 4 percent growth rate. Moreover, governement's commitment to boost up indian rural infrastructure will somehow add value to it.

Focus on delivery mechanisms and streamlining of fiscal framework and the increased investment in NREGA and JNNURM by emphasizing both on much-needed macro infrastructural development and the basic alleviation of the common man, with a focus on inclusive growth will positively impact a large number of consumers and this should give a strong boost to rural demand. Increased outlay on social infrastructure and reduction in tax burden on individuals is likely to result into increase in disposable income, which should, in turn, positively impact the demand for the consumer electronics, FMCG and others sectors.

Well, the status of rural supply chain and public distribution system is very weak. Due to lack of storage facilities, almost 25 per cent of the (agricultural) produce is wasted. This is estimated at even 30-40 per cent for many agri-commodities; in such a scenario, there is clearly an urgent need for focused efforts. Expert Committee on Strengthening and Development of Agricultural Marketing have pegged the investment requirement in the sector at Rs 5,400 crore for dry storage and Rs 27,000 crore for cold storages. The storage capacity in the country against production of vegetables and fruits stands at 12 per cent, against the international average of 50 per cent.

However, with enhanced rural infrastructure this could be one of the potential business for the supply chain companies including warehousing companies and others. Sensing this opportunity, some companies including Shree Shubham Logistics, Adani Logistics, etc. have started their operations for the rural parts of the countries. Now time has come to look at Rural India.

Cheers!!
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