Industry is high and upbeat on prospects of Growth in the Rural Economy -CII-CRIF Rural Business Index
Mumbai, 12th January, 2022: CRIF High Mark in partnership with the Confederation of Indian Industry launched first of its kind Rural Business Confidence Index. According to the Index, the rural business confidence score as of October 2021 is 63.9 and industry is high on optimism and upbeat on rural economy sentiment.
The Survey undertaken across industry sectors from different geographies highlights that 59% of respondents expect their organizations' order books to improve affecting businesses in Rural India; 48% respondents expect profitability of their organization to improve, 54% of respondents expect ease of access to credit to rural economy to improve. Additionally, as per the survey, 88% respondents expect improvement of digital penetration, 72% expect quality of infrastructure to improve and 72% expect improvement in government initiatives and policies to drive rural growth.
The Index further illustrates that despite COVID-19 pandemic, over the last three years from FY 2018-19 to FY 2020-21, Disbursement of retail loans in rural India witnessed a growth of 23% by value (from Rs. 10.10 lakh cr in FY 2018-19 to Rs. 12.45 lakh cr in FY 2020-21) and 30% by volume (from 506 lakhs in FY 2018-19 to 661 lakhs in FY 2020-21). Disbursement of Commercial loans in this period being led by small ticket size loans, witnessed about 100% growth by volume (from 2.4 Lakhs in FY 2018-19 to 4.9 Lakhs in FY 2020-21) but 33% de-growth by value (from Rs. 7.25 Lakh cr in FY 2018-19 to Rs. 4.83 Lakh cr in FY 2020-21). However, MFI loans witnessed a de-growth of 9% by value (from Rs. 1.23 Lakh cr in FY 2018-19 to Rs. 1.12 Lakh cr in FY 2020-21) and 19% by volume (from 396 lakhs in FY 2018-19 to 320 lakhs in FY 2020-21) during the same period.
Mr. Navin Chandani, MD & CEO, CRIF High Mark, said, “In India, two-thirds of the workforce live in rural areas, and the rural economy contributes to almost 46% of our national income. Undoubtedly, it is the backbone of India's economic progress. The COVID-19 epidemic has brought about a significant structural shift in the country and rural India displayed exemplary resilience during this phase. With the next few years being critical for the country’s continued economic growth, it is imperative to have a holistic mechanism that can evaluate and forecast rural business sentiment. Therefore, Confederation of Indian Industry (CII) and CRIF jointly developed the RBC Index. An industry-first, we are certain that the RBC Index will play a pivotal role in equipping key stakeholders with the right data and insights that will further help in devising ways to boost our rural economy, ultimately creating large-scale positive impact”.
On the launch of the RBC Index, Mr Chandrajit Banerjee, Director General, CII, said, “CII is of the firm belief that creating geographically distributed economic growth centers, especially in rural India, is critical to promote equitable and sustainable growth, and most importantly achieve the vision of Aatma Nirbhar Bharat. The intent of this index is to fill the information void by creating a mechanism that can capture how rural economy is performing and support strategic decision making. We are very delighted to have partnered with CRIF High Mark for developing this unique product and are confident that this will help all key stakeholders in creating new paradigms and charter new pathways for economic growth in the country.
“Today, more than ever before Rural Economy has become central to India’s 5 Trillion economy and Aatma Nirbhar Bharat narrative. The Government has systematically introduced a slew of enablers to create a conducive ecosystem to accelerate growth. Because of this innate strength and potential, Rural India today is beginning to witness emergence of new players and new models to create the desired localized virtuous cycle of growth. We are confident, going forward, the Index will act as critical enabler for taking strategic decisions for rural economy”, said, Mr Tarun Sawhney, Chairman CII National Council on Rural & district Economy and Vice Chairman & MD, Triveni Engineering & Industries.
Rural Business Confidence Index is a first-of-its-kind attempt that aims to provide outlook of rural business sentiment for all stakeholders. It is much needed and an all-encompassing view of macro-economic factors affecting rural India, bureau data on rural credit and opinions from micro, small, medium and large corporations across geographies and different sectors.