India's rural economy has contributed to nearly half of the nation’s overall GDP in 2019–2020. Two-thirds of India's population participated in its rural economy in the past two years, and agriculture—the largest sub-sector within the rural economy, had the highest share of output, contributing approximately 37 percent f the total rural GDP, as per a report by Bain & Company and Confederation of Indian Industry (CII).
Supported by central government and private sector initiatives towards physical and digital infrastructure, the agriculture sector has been growing steadily at a compound annual growth rate (CAGR) of 11 percent since 2015, the findings showed.
The report claims that the agriculture sector has also witnessed the highest disruption in terms of smartphone and internet penetration and the ecosystem is now at an inflection point.
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UPI transactions in rural India doubled in the past year; and agri credit grew approximately 10 percent over the last five years. According to Bain-CII estimates, about 30 percent of the rural ecosystem is adopting digital payment and digital commerce solutions to avail easier access to agri-financial services.
The agritech companies that address inefficiencies across the value chain will have explosive growth potential, it added. Significant domestic and international investments are being pumped into the sector to improve efficiency and access to credit.
"Disruption in India’s food and agriculture will evolve from traditional agriculture to new farming models, advanced agri-tech services, and new food products. In the last six years, several start-ups have emerged to reduce systemic inefficiencies among inputs and marketplaces, precision farming, processing, and storage."
Private-equity investments in the agri-tech space have skyrocketed in the last four years, growing at more than 50 percent per annum to aggregate approximately Rs 6.6K Cr till 2020.
(Edited by : Jomy Jos Pullokaran)
First Published: Mar 2, 2022 5:09 PM IST
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