Using E-Commerce to Fuel Rural Growth in India

- by Meenal Nigam & Vivek Patni *

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Agro-Business

'VillageNet' can unshackle the potential of Indian farmers who are trapped in a vicious cycle of low risk taking ability and low investment and low productivity and weak market orientation and low value addition and low margins and low risk taking ability. This results in underdeveloped agro-business sector, which is uncompetitive, despite rich and abundant natural resources.

Such a market-led business model can enhance the competitiveness of Indian agriculture and triggers a virtuous cycle of higher productivity, higher incomes, and enlarged capacity for farmer risk management, larger investments and higher quality and productivity. Further, a growth in rural incomes will also unleash the latent demand for industrial goods so necessary for the continued growth of the Indian economy. This will create another virtuous cycle propelling the economy into a higher growth trajectory.

Figure: Current Value Delivery Model

Source: www.echoupal.com

The idea is to make use of the physical transmission capabilities of current intermediaries - aggregation, logistics, counter-party risk and bridge financing - while disintermediating them from the chain of information flow and market signals.

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* Contributed by -
Meenal Nigam & Vivek Patni,
NITIE, Mumbai.

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