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Why Sabi Holding India Limited is Investing Heavily in the Rural Economy Driven Businesses?

A. Impact of the Globalization

Since 1991, when India opened its market for the Global economy, the country has been seeing rapid urbanization. It is believed that an open market invites better competition, which eventually benefits the consumers.

However, India has traditionally remained a rural economy, where about 80% of the population has lived in the villages.

The rural lifestyle is heavily traditional and the people live close to nature. Therefore the need for urban consumerization has been limited in such a traditional population.

However, since globalization, money has replaced traditional values in the majority of the areas of life, and consumerization has deeply penetrated into our rural economy and lifestyle.

B. Lifestyle Improvement or Consumerized Lifestyle

Global market, more foreign direct investments have surely benefitted the citizens of India with increased per capita income, increased energy availability, increased agricultural and manufacturing production, increased life expectancy, increased employment, increased literacy, and higher education rate.

However, nothing in the world is one-sided, and every growth comes at a cost. One of the major costs that globalization has led to the uncorrupt rural population is consumerization.

Firstly, their natural lifestyle has been marketed as being old, uncivilized, inappropriate, and not modern. Then a new lifestyle and new sets of habits are being given to them. Finally, their existing habits are being brought back to them at a higher cost with branding.

For instance, the Indian rural population has traditionally used Neem tree branches for cleaning their teeth in the morning. They have also used charcoal and salt. Their habits were changed, and they were made to use brush and toothpaste. Now the Neem sticks are sold at $6 in the supermarket as the organic healthy tooth cleaning solutions.

C. Corporation Control

Freedom of the population has now shifted from individuals to corporations. More and more farmers have either sold their land or are selling their land to the corporations.

Corporations are controlling the type of food that the citizens should eat based on their productive convenience. Hence, Indian societies, which have traditionally functioned as cooperative societies, with cooperation-based economies, are continuously being made into independent dysfunctional societies, where the needs of the individuals are catered to by the corporations, and not on the cooperations of the others.

This corporation’s control of the lifestyles of the individuals has weakened the bonds between the people, as the interdependency between the people and the groups is now replaced by dependency on the corporations. This control structure has transformed societies into colonies.

D. Money Devaluation

Money is a debt bond, which means that it is a promise of future higher productivity. Banks can lend ten times the actual capital they have.

All the infrastructure and businesses are created on debt with the hope of better future productivity and profitability. However, when current productivity is delinked from the total capital, and the capital itself is a promise for the future, and because the future is uncertain, the capital itself becomes uncertain.

Money, or a dollar note is a promise by the central financial agency of a country to its people that by having this currency note, people have financial value worth of the currency denomination.

However, as the promise is the future promise and the future is unpredictable as discussed above, the promise, and therefore the currency are both volatile.

E. Loss vs Gain

Because tradition, culture, lifestyle, cooperation, interdependency, land, and water, are real and nonvolatile, corporation-controlled consumerization creates a volatile market, and future, long-term investment by default is volatile in the current context.

It is clear from the last two decades of venture capitalist returns that VC investments have more or less become gamblings, and hardly any VC has made any money from asset capitalization(dividends).

Traditionally investments are designed to create entities that exist for long periods of time to serve society and trade delivered value for equivalent capital gain, unless such a fundamental is created, the investment instrument itself remains a volatile instrument.

F. Sabi Holding India Limited

We understood these inner dynamics of the economy. And so, we are bringing a change in the way we see the businesses. We are encouraging the population to go back to their roots of tradition and cooperation. We are driving investments to cater to the needs of these cooperative communities, rather than gambling on the consumerized colonies.

Even the survival of the corporations depends upon the well-being and prosperity of the population. Humans are social animals and thrive on cooperative societies, rather than controlled Crab-Colonies.

Some quick solutions can be scaled with money and a superficial want can be created, particularly promoting laziness(saving time and effort for the people). Some quick profits can also be made. But as colonies, where laziness is sold, degrade fast, the buying capacity also decreases, reducing the market more quickly than it was created. That puts those corporations too short-lived.

As a venture capital holding company, we want to operate in a much more stable market, with a non-volatile capital structure. This means that the capital market in which we operate needs to be linked to productivity and that productivity must provide for the sustained growth of the people. Therefore, solutions and businesses that bring them closer to their traditions, and transcend the colonies back to cooperative societies are being our focus.

G. Visual Story of Investment into the Rural Economy and Businesses Inspired by Tradition

[Coming soon]

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