Rural markets have their own challenges. In a country like India, where the fortune is at the bottom of pyramid, its importance increases even more. Rural distribution will play a vital role in the growth of FMCG in India which is set to double from the current levels and hit USD 104 bn by 2020. Making standard goods available to the rural population is itself a challenge. Furthermore when it comes to providing subsidized goods to rural markets, the challenge is even bigger considering a high possibility of the subsidy not reaching the right set of people. We learnt about the rural distribution challenge in India of goods and services in an earlier post Distribution Strategies for Rural Market – Indian Perspective where we discovered how organization as well as government use various rural establishments such as Cooperative Societies, Public Distribution System, Mandi etc to make products and services available to the rural population.
Digital India gradually bridging the gap in Rural Distribution
Organizations have already resorted to computer aided reporting of product stocks, sales etc- to make sure that they have the right information. This data is also helping companies to fight challenges in rural distribution as well as in decision making while establishing a rural distribution network. Indian government, with the Digital India initiatives, is also aiming to fight the rural distribution challenge by adopting real time reporting to avoid malpractice. However, with low penetration of data networks in rural areas these efforts are yet to reap full fledged results.
Government to use Postmen to fight Rural Distribution Challenge
Recently, to combat rural distribution challenge during the festive season, the Government has decided to use postal network for distribution of subsidised pulses and to release more Chana from buffer stock to ensure availability of these commodities at reasonable prices. The decisions were taken in the Inter Ministerial Committee on prices of essential commodities headed by Union Consumer Affairs Secretary in New Delhi. The committee reviewed availability and prices of essential commodities, especially pulses and suggested that in the absence of Government outlets in the states, postal networks should be used for the distribution.
The committee also reviewed the procurement arrangements of Kharif pulses by Government agencies. It was informed that so far 500 procurement centres have been opened and farmers are being paid through checks or bank transfers. The Government has set up procurement target of 50,000 MT for current Kharif pulses.
The government operated Indian Postal Services is anyways having a tough time with the advent of digital communication channels. Recently, the Indian Post stopped its Telegram Service which was barely being used in the 21st century. With decreasing responsibilities of the Indian Post employees, this might be a good idea to capitalize on their unmatched reach and simultaneously make subsidies accessible to the common man. We hope that with increasing penetration of data connectivity, especially with Reliance Jio network covering majority of India and device costs dropping everyday it is very much likely that the next festive season the government might not need to seek support of the India Post to fight rural distribution challenge.
