Rural spending getting captured in urban consumption; women SHGs helping boost incomes: SBI Research
physical infrastructure and connectivity have impacted rural demand and supply patterns, with rural spending getting captured in urban areas, according to latest SBI research.
“A farmer can travel many kms easily to buy and sell things and these purchases will be counted in urban numbers (implying less numbers captured for rural and semi-urban areas) even though they are bought by primarily rural populace,” SBI researchers said in a report released Monday.
The researchers noted that the phenomenal growth in income of self-help groups may also be a factor contributing to this shift, which has been helped by better banking linkages and access to credit.
The money credited to accounts of female self-help group members, which is used as a proxy for income, is expected to be 2.8-times more in rural areas and 3.2-times more in semi-urban regions in FY24 compared with FY19.
“72.7% of Rural SHG POS transactions are in Metro Region and are outside their districts…. Rural SHG members also spend considerably well in Semi-Urban and Urban regions,” SBI researchers noted.
The researchers also highlighted a higher share of rural ATM transactions in metro and urban regions and an increasing reliance on mobile via Unified Payments Interface for merchant transactions.
Women-gaining ground
The study also found a significant leg up for women in terms of labour force participation given the support provided by self-help groups.
“With the rise in income of female SHG members, rural female LFPR is also rising,” SBI noted.
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