RURAL DEVELOPMENT

Introduction
 Agriculture is the major source of livelihood in the rural sector. Mahatma Gandhi once said that the real progress of
India did not mean simply the growth and expansion of industrial urban centres but mainly the development of the
villages. This idea of village development being at the centre of the overall development of the nation is relevant even
today.
 About 22 % of our total population still lives below poverty line.
 It is because more than two-third of India’s population depends on agriculture that is yet to become productive
enough to provide for them.
 One-fourth of rural India still lives in abject (terrible) poverty. That is the reason why we have to see a developed
rural India if our nation has to realise real progress.
 Although the share of agriculture sector’s contribution to GDP was on a decline, the population dependent on this
sector did not show any significant change.
 Further, after the initiation of reforms, the growth rate of agriculture sector decelerated to about 3 % per annum during
the 1991-2012, which was lower than the earlier years.
 In recent years, this sector has become volatile.
 During 2014-15, the GVA growth rate of agriculture and its allied sectors was less than 1 %.
 Scholars identify decline in public investment since 1991 as the major reason for this.
 They also argue that inadequate infrastructure, lack of alternate employment opportunities in the industry or service
sector, increasing casualisation of employment (moving from regular salaried and self-employed to casual work)
etc., further impede (Disturbs) rural development.
 The impact of this phenomenon can be seen from the growing distress witnessed among farmers across different parts
of India.
What is Rural Development?
 Rural development is a comprehensive term.
 3/4th of the total population lives in rural India.
 It essentially focuses on action for the development of areas that are lagging behind in the overall development of the
village economy.
Process of Rural Development
 Development of human resources including- literacy (more specifically female literacy), education and skill
development.
 Health, addressing both sanitation and public health.
 Land reforms: Eliminating exploitation in land relations.
 Development of the productive resources of each locality: Particularly Non-farming.
 Infrastructure development: Like electricity, irrigation, credit, marketing, transport facilities including
construction of village roads and feeder roads to nearby highways, facilities for agriculture research and
extension, and information dissemination.
 Special measures for alleviation of poverty and bringing about significant improvement in the living conditions
of the weaker sections of the population emphasizing access to productive employment opportunities. All this
means that people engaged in farm and non-farm activities in rural areas have to be provided with various
means that help them increase the productivity.
 They also need to be given opportunities to diversify into various non-farm productive activities such as food
processing.
 Enabling them better and more affordable access to healthcare, sanitation facilities at workplaces and homes and
education for all would also need to be given top priority for rapid rural development.
CREDIT AND MARKETING IN RURAL AREAS
CREDIT:
 Growth of rural economy depends primarily on infusion (addition) of capital, from time to time, to realise
higher productivity in agriculture and non-agriculture sectors.
 As the time gestation between crop sowing and realisation of income after production is quite long, farmers
borrow from various sources to meet their initial investment on seeds, fertilisers, implements and other family
expenses of marriage, death, religious ceremonies etc.
  At time of independence, moneylenders and traders exploited small & marginal farmers and landless labourers
by lending to them on high interest rates and by manipulating the accounts to keep them in a debt-trap.
 A major change occurred after 1969 when India adopted social banking and multi-agency approach to
adequately meet the needs of rural credit.
 Later, the National Bank for Agriculture and Rural Development (NABARD) was set up in 1982 as an apex
body to coordinate the activities of all institutions involved in the rural financing system.
 The Green Revolution was a harbinger of major changes in the credit system as it led to the diversification of
the portfolio of rural credit towards production-oriented lending.
SOURCES OF RURAL CREDIT:
INSTITUTIONAL NON-INSTITUTIONAL: Money lenders, Relatives, Agents, Rich Landlords

 The institutional structure of rural banking today consists of a set of multi-agency institutions.
a) Commercial banks
b) Regional rural banks (RRBs)
c) Cooperatives
d) Land development banks
These are expected to dispense adequate credit at cheaper rates.
 Recently, Self-Help Groups (henceforth SHGs) have emerged to fill the gap in the formal credit system
because the formal credit delivery mechanism has not only proven inadequate but has also not been fully
integrated into the overall rural social and community development.
 Since some kind of collateral is required, vast proportion of poor rural households were automatically out of the
credit network.
 The SHGs promote thrift (savings culture) in small proportions by a minimum contribution from each member.
 From the pooled money, credit is given to the needy members to be repayable in small instalments at
reasonable interest rates.
 By May 2019, nearly 6 crores women in India have become member in 54 lakh women SHGs.
 SHGs have helped in the empowerment of women.
MICRO-CREDIT PROGRAMMES
 About ₹10,000 - ₹ 15,000 per SHG and another ₹ 2.5 lakhs per SHG as a Community Investment Support Fund
(CISF) are provided as part of renovating fund to take up self-employment for income generation.
 Such credit provisions are generally referred to as micro-credit programmes.
PROBLEMS OF SHG
 It is alleged that the borrowings are mainly confined to consumption purposes and very less for productive
purposes.
Rural Banking: A Critical Appraisal:
Rapid expansion of the banking system had a positive effect on:
a) Rural farm and non-farm output, income and employment.
b) Especially after the Green Revolution (1960’s):
 It helped farmers to avail services & credit facilities & a variety of loans for meeting their production needs.
 Famines became events of the past; we have now achieved food security which is reflected in the abundant
buffer stocks of grains.
Problems faced:
a) Insufficiency: More demand but less supply
b) Inadequate coverage of Institutional sources: Failed to cover entire rural farmers
c) Inadequate amount of sanctions: Unproductive purposes
d) Less attention to poor and marginal farmers: Due to lack of collateral
e) Growing overdue: Deliberate refusal by farmers to repay
Thus, the expansion and promotion of the rural banking sector has taken a backseat after reforms. To improve the
situation, from 2014, all the adults are encouraged to open bank accounts as a part of a scheme known as Jan- Dhan
Yojana.
Features of Jan-Dhan Yojana:
 Those bank holders can get ₹ 1-2 lakh accidental insurance coverage and overdraft facilities for ₹ 10,000.
  Get their wages, old age pension and other social security payments of the government transferred to bank
accounts.
 There is no need to keep minimum bank balance. This has led to more than 40 crores people opening bank
accounts; indirectly it has promoted thrift habit and efficient allocation of financial resources particularly in rural
areas. Banks also could mobile funds of more than ₹ 1,40,000 crores through these accounts.
AGRICULTURAL MARKET SYSTEM
Have you ever asked yourself how food grains, vegetables and fruits that we consume daily come from different parts of
the country? The mechanism through which these goods reach different places depends on the market channels.
Meaning:
Agricultural marketing is a process that involves the assembling, storage, processing, transportation, packaging,
grading and distribution (PAST-GDP) of different agricultural commodities across the country.
Problems faced by farmers:
a) Prior to independence, farmers, while selling their produce to traders, suffered from faulty weighing and
manipulation of accounts.
b) Farmers who did not have the required information on prices prevailing in markets were often forced to sell at low
prices.
c) They also did not have proper storage facilities to keep back their produce for selling later at a better price.
Do you know that even today, more than 10 % of goods produced in farms are wasted due to lack of storage?
Therefore, government intervention became necessary to regulate the activities of the private traders. Let us discuss
four such measures that were initiated to improve the marketing aspect.
Measures to improve Agricultural marketing:
a) Regulated Markets:
The first step was regulation of markets to create orderly and transparent marketing conditions. By and large, this
policy benefited farmers as well as consumers. However, there is still a need to develop about 27,000 rural periodic
markets as regulated market places to realise the full potential of rural markets.
b) Provision of physical infrastructure:
Facilities like roads, railways, warehouses, godowns, cold storages and processing units. The current infrastructure
facilities are quite inadequate to meet the growing demand and need to be improved.
c) Cooperative marketing:
In realising fair prices for farmers’ products, Cooperative marketing is the third aspect of government initiative. The
success of milk cooperatives in transforming the social and economic landscape of Gujarat and some other parts of
the country is testimony (proof) to the role of cooperatives.
However cooperatives have received a setback during the recent past due to inadequate coverage of farmer members,
lack of appropriate link between marketing and processing cooperatives and inefficient financial management.
d) Policy instruments:
i) Assurance of minimum support prices (MSP) for agricultural products
ii) Maintenance of buffer stocks of wheat and rice by Food Corporation of India
iii) Distribution of food grains and sugar through PDS.
These instruments are aimed at protecting the income of the farmers and providing food grains at a subsidised rate to
the poor. However, despite government intervention, private trade (by money lenders, rural political elites, big
merchants and rich farmers) pre-dominates agricultural markets.
 The need for government intervention is imminent particularly when a large share of agricultural products, is
handled by the private sector.
 Agricultural marketing has come a long way with the intervention of the government in various forms.
 Some scholars argue that commercialisation of agriculture offers tremendous scope for farmers to earn higher
incomes provided the government intervention is restricted.
EMERGING ALTERNATE MARKETING CHANNELS:
 It has been realised that if farmers directly sell their produce to consumers, it increases their incomes.
 Some examples of these channels are;
a) Apni Mandi (Punjab, Haryana and Rajasthan)
b) Hadaspar Mandi (Pune)
c) Rythu Bazars (vegetable and fruit markets in Andhra Pradesh, Telangana)
d) Uzhavar Sandies (farmers markets in Tamil Nadu)
 Further, several national and multinational fast food chains are increasingly entering into contracts / alliances with
farmers to encourage them to cultivate farm products (vegetables, fruits, etc.) of the desired quality by providing them
with not only seeds and other inputs but also assured procurement of the produce at pre-decided prices.
 It is argued that such arrangements will help in reducing the price risks of farmers and would also expand the
markets for farm products.
 In 2020, Indian Parliament passed three laws to reform agriculture marketing system.
 While some section of farmers support these reforms, the rest of the farmers oppose and these Acts are still being
debated.
DIVERSIFICATION INTO PRODUCTIVE ACTIVITIES
 Diversification includes two aspects-
a) Change in cropping pattern
b) Shift of workforce from agriculture to other allied activities (livestock, poultry, fisheries etc.) and non-agriculture
sector.
 The need for diversification arises from the fact that there is greater risk in depending exclusively on farming for
livelihood.
 Diversification towards new areas is necessary not only to reduce the risk from agriculture sector but also to provide
productive sustainable livelihood options to rural people.
 Much of the agricultural employment activities are concentrated in the Kharif (June to October, rainy) season.
 But during the Rabi season, in areas where there are inadequate irrigation facilities, it becomes difficult to find
gainful (Better work profile) employment.
 Therefore expansion into other sectors is essential to provide supplementary gainful employment and in realising
higher levels of income for rural people to overcome poverty and other tribulations (Suffering).
 Hence, there is a need to focus on allied (related) activities, non-farm employment and other emerging alternatives of
livelihood, though there are many other options available for providing sustainable livelihoods in rural areas.
 As agriculture is already overcrowded, a major proportion of the increasing labour force needs to find alternate
employment opportunities in other non-farm sectors.
 Non-farm economy has several segments in it:
a) Some possess dynamic linkages that permit healthy growth.
b) While others are in subsistence, low productivity propositions.
 The dynamic sub-sectors include agro-processing industries, food processing industries, leather industry, tourism,
etc.
 Those sectors which have the potential but seriously lack infrastructure and other support include traditional home-
based industries like pottery, crafts, handlooms etc.
 Majority of rural women find employment in agriculture while men generally look for non-farm employment.
 In recent times, women have also begun looking for non-farm jobs.
ANIMAL HUSBANDRY:
 In India, the farming community uses the mixed crop-livestock farming system- cattle, goats, fowl are the widely
held species.
 Livestock production provides increased stability in income, food security, transport, fuel and nutrition for the family
without disrupting other food-producing activities.
 Today, livestock sector alone provides alternate livelihood options to over 70 million small and marginal farmers
including landless labourers.
 A significant number of women also find employment in the livestock sector.
 Poultry accounts for the largest share with 61 % followed by others.
 Other animals which include camels, horses, ponies and mules are in the lowest rung.
 India had about 303 million cattle, including 110 million buffaloes in 2019.
 Performance of the Indian dairy sector over the last three decades has been quite impressive.
 Milk production in the country has increased by about 10 times between 1951-2016.
 This can be attributed mainly to the successful implementation of ‘Operation Flood’.
 It is a system whereby all the farmers can pool their milk produced according to different grading (based on quality),
processed and marketed to urban centres through cooperatives.
 In this system the farmers are assured of a fair price and income from the supply of milk to urban markets.
 As pointed out earlier Gujarat state is held as a success story in the efficient implementation of milk cooperatives
which has been emulated by many states.
 Gujarat, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Maharashtra, Punjab and Rajasthan are major milk
producing states.
 Meat, eggs, wool and other by-products are also emerging as important productive sectors for diversification.
FISHERIES:
 The fishing community regards the water body as ‘mother’ or ‘provider’.
 The water bodies consisting of sea, oceans, rivers, lakes, natural aquatic ponds, streams etc. are, therefore, an integral
and life-giving source for the fishing community.
 In India, after progressive increase in budgetary allocations and introduction of new technologies in fisheries and
aquaculture, the development of fisheries has come a long way.
 Presently, fish production from inland sources contributes about 65 % to the total value of fish production and the
balance 35 % comes from the marine sector (sea and oceans).
 Today total fish production accounts for 0.9 % of the total GDP. In India, West Bengal, Andhra Pradesh, Kerala,
Gujarat, Maharashtra and Tamil Nadu are major fish producing states.
 Rampant underemployment, low per capita earnings, absence of mobility of labour to other sectors and a high rate
of illiteracy and indebtedness are some of the major problems fishing community face today.
 Even though women are not involved in active fishing, about 60 % of the workforce in export marketing and 40 %
in internal marketing are women.
 There is a need to increase credit facilities through cooperatives and SHGs for fisherwomen to meet the working
capital requirements for marketing.
HORTICULTURE:
 Blessed with a varying climate and soil conditions, India has adopted growing of diverse horticultural crops such as
fruits, vegetables, tuber crops, flowers, medicinal and aromatic plants, spices and plantation crops.
 These crops play a vital role in providing food and nutrition, besides addressing employment concerns.
 Horticulture sector contributes nearly one-third of the value of agriculture output and 6% of Gross Domestic Product
of India.
 India has emerged as a world leader in producing a variety of fruits like mangoes, bananas, coconuts, cashew nuts
and a number of spices and is the 2nd largest producer of fruits and vegetables.
 Economic condition of many farmers engaged in horticulture has improved and it has become a means of improving
livelihood for many unprivileged classes.
 Flower harvesting, nursery maintenance, hybrid seed production and tissue culture, propagation of fruits and flowers
and food processing are highly remunerative (High paying) employment options for women in rural areas.
Critical appraisal of Animal Husbandry, Fisheries & Horticulture
 Though, in terms of numbers, our livestock population is quite impressive but its productivity is quite low as
compared to other countries.
 It requires improved technology and promotion of good breeds of animals to enhance productivity.
 Improved veterinary care and credit facilities to small and marginal farmers and landless labourers would enhance
sustainable livelihood options through livestock production.
 Production of fisheries has already increased substantially. However problems related to over- fishing and pollution
need to be regulated and controlled.
 Welfare programmes for the fishing community have to be reoriented in a manner which can provide long-term
gains and sustenance (nourishment) of livelihoods.
 Horticulture has emerged as a successful sustainable livelihood option and needs to be encouraged significantly.
 Enhancing its role requires investment in infrastructure like electricity, cold storage systems, marketing linkages,
small-scale processing units and technology improvement and dissemination.
OTHER ALTERNATE LIVELIHOOD OPTIONS:
 There is broad consensus that IT can play a critical role in achieving sustainable development and food security in
the 21st century.
 Governments can predict areas of food insecurity and vulnerability using appropriate information and software tools
so that action can be taken to prevent or reduce the likelihood of an emergency.
 It also has a positive impact on the agriculture sector as it can disseminate information regarding emerging
technologies and its applications, prices, weather and soil conditions for growing different crops etc.
 Though IT is, by itself, no catalyst of change but it can act as a tool for releasing the creative potential and
knowledge embedded in the society. It also has potential of employment generation in rural areas.
 Experiments with IT and its application to rural development are carried out in different parts of India.
SUSTAINABLE DEVELOPMENT AND ORGANIC FARMING
 In recent years, awareness of harmful effect of chemical-based fertilisers and pesticides on our health is on a rise.
 Conventional agriculture relies heavily on chemical fertilisers and toxic pesticides etc., which enter the food supply,
penetrate the water sources, harm the livestock, deplete the soil and devastate natural eco-systems.
 Efforts in evolving technologies which are eco-friendly are essential for sustainable development and one such
technology which is eco-friendly is organic farming.
 In short, organic agriculture is a whole system of farming that restores, maintains and enhances the ecological
balance.
 There is an increasing demand for organically grown food to enhance food safety throughout the world.
BENEFITS OF ORGANIC FARMING:
 Organic agriculture offers a means to substitute costlier agricultural inputs (such as HYV seeds, chemical
fertilisers, pesticides etc.) with locally produced organic inputs that are cheaper and thereby generate good returns
on investment.
 Organic agriculture also generates income through exports as the demand for organically grown crops is on a rise.
 Studies across countries have shown that organically grown food has more nutritional value than chemical farming
thus providing us with healthy foods.
 Since organic farming requires more labour input than conventional farming, India will find organic farming an
attractive proposition.
 Finally, the produce is pesticide-free and produced in an environmentally sustainable way.
 Popularising organic farming requires awareness and willingness on the part of farmers to adapt to new technology.
PROBLEMS OF ORGANIC FARMING
 Inadequate infrastructure and the problem of marketing the products are major concerns which need to be
addressed apart from an appropriate agriculture policy to promote organic farming.
 It has been observed that the yields from organic farming are less than modern agricultural farming in the initial
years.
 Therefore, small and marginal farmers may find it difficult to adapt to large scale production. Organic produce may
also have more blemishes (spoilage) and a shorter shelf life than sprayed produce.
 Moreover choice in production of off-season crops is quite limited in organic farming.
 Nevertheless, organic farming helps in sustainable development of agriculture and India has a clear advantage in
producing organic products for both domestic and international markets.
CONCLUSION
 It is clear that until and unless some spectacular changes occur, the rural sector might continue to remain backward.
 There is a greater need today to make rural areas more vibrant through diversification into dairying, poultry,
fisheries, vegetables and fruits and linking up the rural production centres with the urban and foreign (export)
markets to realise higher returns on the investments for the products.
 Infrastructure elements like credit and marketing, farmer friendly agricultural policies & a constant appraisal &
dialogue between farmers’ groups & State agricultural departments are essential to realise full potential of sector.
 Today we cannot look at the environment and rural development as two distinct subjects.
 There is need to invent or procure alternate sets of ecofriendly technologies that lead to sustainable development in
different circumstances. From these, each rural community can choose whatever will suit its purpose. We need to
learn from, and also try out when found relevant, practices from the available set of ‘best practice’ illustrations to
speed up this process of ‘learning by doing’.