RURAL ECONOMICS

Unit – 1 Basic Concept of Rural Economics

Chapter : 1 – Introduction to Rural Economics

Meaning of Rural Economy:Rural economics is the study of rural

economies. Ruraleconomies include both agricultural and non-agricultural
industries, so rural economics has broader concerns than agricultural economics
which focus more on food systems. Rural development and finance attempt to
solve larger challenges within rural economics.

In general, rural economics is the study of rural economies

including:
• farm and non-farm industry.
• economic growth, development, and change
• size and spatial distribution of production and household units
and interregional trade
• land use
• Housing and non-housing as to supply and demand
• migration and (de)population
• finance
• government policies as to development, investment, regulation
and transportation
• general - equilibrium and welfare analysis, for example, system
interdependencies and rural-urban income disparities.

Objectives of Rural Economy

• To develop farm, home, public service and village community.

• To bring improvement in producing crops and animals living
condition.
• To improve health and education condition etc. improvement of the
rural people.
• To improve villagers with their own efforts.
• To improve village communication.

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Characteristics of Rural Economy

Size of the Community: The village communities are smaller in area than
the urban communities. As the village communities are small, the population
is also low.
Social Mobility: In rural areas, mobility is rigid as all the occupations are
based on caste. Shifting from one occupation to another is difficult as caste
is determined by birth. Thus, caste hierarchy determines the social status of
the rural people.

Density of Population: As the density of population is low, the people

have intimate relationships and face-to-face contacts with each other. In a
village, everyone knows everyone.

• Agriculture is the Main Occupation: A farmer has to perform various agricultural

activities for which he needs the cooperation of other members. Usually, these members
are from his family. Thus, the mem-bers of the entire family share agricultural activities.
That is the reason why Lowry Nelson has mentioned that farming is a family enterprise.
• Homogeneity of Population: The village communities are homogenous in nature.
Most of their inhabitants are connected with agriculture and its allied occupations, though
there are people belonging to different castes, religions and classes.
• Social Stratification: In rural society, social stratification is a traditional characteristic,
based on caste. The rural society is divided into various strata on the basis of caste.
• Social Solidarity: The degree of social solidarity is greater in villages as compared to
urban areas. Common experience, purposes, customs and traditions form the basis of
unity in the villages.
• Social Interaction: The frequency of social interaction in rural areas is com-paratively
lower than in urban areas. However, the interaction level possesses more stability and
continuity. The relationships and interactions in the prima-ry groups are intimate. The
family fulfils the needs of the members and exer-cises control over them. It is the family,
which introduces the members to the customs, traditions and culture of the society. Due
to limited contacts, they do not develop individuality and their viewpoint towards the
outside world is very narrow, which makes them oppose any kind of violent change.

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• Joint Family: Another characteristic feature of the rural society is the joint family
system. The family controls the behaviour of the individuals. Generally, the father is the
head of the family and is also responsible for maintaining the discipline among members.
He manages the affairs of the family.

Indicators of Rural Development :

“Rural development is a strategy designed to improve the economic and social
life of rural poor.” The United Nations defines RD as a process of change, by which the
efforts of the people themselves are united, those of government authorities to improve
their economic, social and cultural conditions of communities in to the life of the nation
and to enable them to contribute fully to national programme.
The rural communities are tangential to the mainstream of the Indian economy
have not been substantially benefited from the present growth and developments
happening in the country. Even after seventy years of independence, agriculture growth
continues to be feeble, farmers are still hit by poverty, poor prefer to stay in urban slums
rather stagnant villages. The rural communities do not have basic amenities like
healthcare centers and schools. Rural people lack in many aspects of a modern living
such as education, electricity, infrastructure, health, etc. Article 14 of the Indian
Constitution provides ‘Rights to Equality’ so they should be given their respective rights.

The objectives of the Rural Development :

 To identify various factors that contributes for the RD.
 To establish cause and effect among the factors that contributes to RD.
 To develop a conceptual index taking factors contributing to RD.

The proposed Indicators as given below

1. Economy
2. Education :Rural areas are deprived of basic amenities and education is one
among them. Most of the schools do not have teachers in rural areas. The capacity
building for teachers is necessary to enhance their competency levels. The
availability of the teachers available in rural areas directly impacts the educational

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level. The educational facilities such as high school, college etc determines the
individuals to decide on whether to continue with the further education or not.
3. Health :It takes into account the availability of the medical facility such as
infrastructure, availability ambulance and critical medicines etc. The very
important aspect here is the availability of the manpower such as Doctors, Nurses,
Paramedical Staff and Pharmacists.
4. Environment :Environmental aspects is gaining a moment as Global warming
is impacting the man-kind. E nvironment or the existing environment that will
comprise of Water quality, Ambient Air quality, Soil quality and the existence of
any natural forest.

5. Culture and Leisure :The amount of money spent on the culture and leisure
aspects also will indicate the economic status of the rural community. Rural people spend
mostly on the local festivals in India such as during Diwali and Ugadi time. The amount
of the money spent on entertainment such as movies, fairs etc needs to be taken into
account. The spending if the rural community is important as it is directly proportional to
their earnings. The higher the earnings the higher will be the spending on the culture and
leisure aspects and this will also reflect on the economic status of the rural community.
Hence spending on culture and leisure are taken into account in RDI.

Elements / Concepts of Inclusive in Rural Growth / Development

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Sustainable Development :
Develop programmes for income generation and better utilization of resources, through field programmes
designed specifically for rural communities.

Conservation efforts are rarely successful in the absence of a general understanding of the need to integrate
environmental consideration into development strategy.

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Chapter :2 – Approaches to Rural Development

Rural areas are an important asset for development in our country. Most of the
population in India happen to live in rural areas and their basic occupation is
agriculture.

Gandhian Approach of Rural Development

Gandhian approach to rural development may be labelled as ‘idealist’.

It attaches supreme importance to moral values and gives primacy to moral values over
material conditions. The Gandhians believe that the source of moral values in general lies
in religion and Hindu scriptures like the Upanishads and the Gita.

• The concept of „Rama Rajya‟ is the basis of Gandhiji”s idea of an ideal social order.
• Gandhi defined Rama Rajya as “sovereignty of the people based on moral authority”.
• He did not view Rama as a king, and people as his subjects.
• the Gandhian scheme, „Rama‟ stood for God or one’s own “inner voice” .
• Gandhi believed in a democratic social order in which people are supreme.

Community Development Approach :

Rural community development encompasses a range of approaches and activities

that aim to improve the welfare and livelihoods of people living in rural areas.

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Minimum Needs Approach :

The basic needs approach is one of the major approaches to the

measurement of absolute poverty in developing countries globally.

Integrated Rural Development :

The Integrated Rural Development Program (IRDP) was launched by the Government of
India during 1978 and implemented during 1980. The aim of the program is to provide
employment opportunities to the poor as well as opportunities to develop their skill sets
so as to improve their living conditions. The program is considered one of the best
yojanas to do away with poverty related problems by offering those who fell below the
poverty line the necessary subsidies in tandem with employment opportunities.
Objective of IRDP :

The objective of Integrated Rural Development Program is

1. to help families who live below the poverty line to enhance their state of living and
to empower the poor by helping them develop at every level.

2. The program’sareproviding productive assets and inputs to its target groups.

3. The assets, which could be in the primary, secondary or tertiary sector are
provided as financial assistance to these families in the form of government
subsidies as well as loans or credit from financial institutions.
Beneficiaries of the Integrated Rural Development Program :

• Rural artisans
• Labourers
• Marginal Farmers
• Scheduled castes and scheduled tribes
• Economically backward classes with an annual income of less that Rs 11,000

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Chapter :3 – Poverty and Unemployment in Rural India

Meaning of Poverty :Poverty is a state or condition in which a person or

community lacks the financial resources and essentials for a minimum standard of
living. Poverty means that the income level from employment is so low that basic human
needs can't be met. Poverty-stricken people and families might go without proper
housing, clean water, healthy food, and medical attention.

Meaning of Unemployment :unemployment, the condition of one who is

capable of working, actively seeking work, but unable to find any work. It is
important to note that to be considered unemployed a person must be an active member
of the labour force and in search of remunerative work.

Measurement of Poverty :This way of measuring poverty includes the

consideration that expenditure on food in households is a constant proportion of total
expenditure. The poverty line is fixed by multiplying the value of the basic food
products by the reverse of the proportion that food expenditure signifies for total
expenditure.

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Causes of Poverty :

1. Increase rate of rising population:

2. Less productivity in agriculture: lack of capital, use of traditional
methods of cultivation, illiteracy etc. The very reason for
poverty in the country is this factor only.
3. Less utilization of resources:
4. A short rate of economic development:
5. Increasing price rise:
6. Unemployment:
7. Shortage of capital and able entrepreneurship:
8. Social factors:The caste system, inheritance law, rigid traditions.
9. Political factors:
10. Unequal distribution of income:
11. The problem of distribution:
12. Regional poverty:India is divided by the inappropriate .
proportion of poor in some states, like Nagaland, Orissa, Bihar, .
Nagaland, etc.
13. Provision for minimum requirements of the poor:water, primary
medicalcare, and primary education etc.

Farm and Non-farm employment

Farm Employment :The notion of agricultural employment includesall

persons who work, full-time or part-time, on an agricultural holding.

Non-Farm Employment :Non-farm (or off-farm) work is defined

as any remunerative work outside one's own farm. It includes wage labour
on other farms, wage labour engaging in non-farm work, or running non-farm
enterprises or businesses.

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Measurement of employment in Rural

1. Full-time employment ·
2. Part-time employment ·
3. Casual employment ·
4. Contract employment ·
5. Apprenticeship ·
6. Traineeship ·
7. Employment on commission
8.Probation

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Types of employment

• Self Employed.
• Casual wage Labourers.
• Regular Salaried Employees.

Poverty Alleviation Programmes in india.

• National Food for Work Programme.

• Swaranjayanti Gram Swarozgar Yojana (SGSY)
• Sampoorna Grameen Rozgar Yojana (SGRY)
• Rural Housing – Indira Awaas Yojana (IAY)
• Pradhan Mantri Gramodaya Yojana (PMGY)
• Rural Employment Generation Programme (REGP)
• Prime Minister's Rozgar Yojana (PMRY)
• Pradhan Mantri Gram Sadak Yojana (PMGSY)

Employment Generation Programmes in India

• Mahatma Gandhi National Rural Employment Guarantee Scheme

(MGNREGS)
• Deendayal Antyoday Yojana- National Rural Livelihood Mission (DAY-
NRLM)
• Deendayal Upadhyay- Gramin Kaushalya Yojana (DDU-GKY)
• Pradhan Mantri Gram Sadak Yojana (PMGSY)
• Shyama Prasad Mukherjee RURban Mission
• National Career Service (NCS)

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Unit – 2 Rural Infrastructre : MSMEs , Banking ,

Health and Education
Chapter :4 – Rural Enterprises

Meaning of Rural Enterprises :Rural Enterprise means a group of

people with common economic interests (i.e., farmers, fisherfolk, agro-
processors, tour guides, craft makers, etc.), who have formed a legally
recognized organization to carry out business activities.

Importance of Rural Enterprises :

• Proper Utilization of Local Resources

• Employment Generation
• Prevent Rural Exodus (Leaving Village)
• Faster Economic Development
• Producer Goods of Consumer Choice
• Entrepreneur Development.

MSMEs :(Micro, Small, and Medium Enterprises)

The Government of India has introduced MSME or Micro,

Small, and Medium Enterprises in agreement with Micro,
Small and Medium Enterprises Development (MSMED) Act of
2006. These enterprises primarily engaged in the production,
manufacturing, processing, or preservation of goods and
commodities.

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Classification of MSMEs :

Type of enterprise Investment Turnover

Micro - Rs 1 crore - Rs 5 crore

Small - Rs 10 crore - Rs 50 crore

Medium - Rs 50 crore - Rs 250 crore

Progress of MSMEs :

• There is no doubt that MSMEs play a critical role in Nation

Building and growth of the economy.
• government targets its ease of doing business initiative
towards MSMEs.
• This could be done by framing conducive policies, offering
incentives and most important, removing the on-ground
hurdles, easy access to credit being a prime example.
• It is important to bring the MSME sector under the umbrella of
financial inclusion in India.
• Sustainable growth of this sector will be ensured only if they
are able to easily access finance in a timely manner.
• Allowing more data and technology-driven fintechs to finance
MSMEs will, therefore, strengthen both – the MSMEs and the
financial sector.

Problems of MSMEs :

The following are a few primary challenges facing MSMEs.

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1. Financial Issues.
MSMEs in India face many challenges due to a lack of finance. Most MSME owners
come from rural and education-deprived areas, and their ignorance of government
benefits makes them unaware of their special financial privileges. Their carelessness
leads them to make bad financial decisions, causing financial difficulties.

Furthermore, MSME firms in India are typically less creditworthy than their larger
counterparts. As MSMEs have no assets to surrender as collateral, lenders cannot analyse
or know whether they can repay their loans.

2. Skills
Since Indian MSMEs depend heavily on informal workers who are often underpaid and
lack the technical skills necessary to boost productivity, Indian MSMEs are far behind
their counterparts in other countries. In the long run, this impacts the growth prospects of
smaller firms by making them take on jobs requiring limited skill and expertise.

3. Marketing and Managerial-Related Challenges

MSME growth remains a significant hurdle due to the absence of entrepreneurial,
managerial, and marketing skills. Boosting sales and acquiring new customers requires
the right marketing strategies. Additionally, MSMEs face challenges related to
ineffective marketing strategies, lack of market analysis, and identifying target audiences
in India. Thus, MSMEs cannot compete due to a lack of professionalism and structured
management.

Furthermore, a lack of education, knowledge about market trends, consumer preferences,

and advanced technology has hindered the development of this sector.

4. Technology Remains A Primary Deterrent

Due to a lack of expertise and awareness, most businesses miss out on the latest
technological developments. To grow their businesses, MSMEs must keep up with the
changing trends in technology.

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5. Labour-Related Challenges
A successful manufacturing enterprise depends on skilled labour. Many inconsistencies
exist in MSMEs regarding skilled personnel and complying with labour laws. The lack of
affordable skilled labour further compounds MSMEs' woes.

While MSME firms face numerous challenges, the government strives to make this
sector more competitive. There is a gradual decrease in funding costs while the public
and private sectors strive to develop more competitive products.

Khadi and Village Industries :The Khadi and Village

Industries (KVI) are playing an important role in Indian economy
as it covers about 2.48 lakh villages throughout the country. Over
the years, the main thrust of KVI activities has been to provide a
larger share of employment to scheduled caste and scheduled
tribes and women.

Khadi Industries :KHADI , a fabric that breaths “Warm in Winter,

Cool in Summer” Khadi is a handspun and hand woven cloth which acquired
patriotic status during Indian freedom struggle and it gave a “SWADESHI
SPIRIT”.

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Village Industries : Any industry located in a rural area which

produces any goods or renders any service with or without the use of power
and in which the fixed capital investment per head of an artisan or a worker
does not exceed [one lakh rupees] or such other sum as may, by notification in
the Official Gazette, be specified from time to time by the Central
Government Provided that any industry specified in the Schedule and located
in an area other than a rural area and recognised as a village industry at any
time before the commencement of the Khadi and Village Industries
Commission (Amendment) Act, 1987 shall, notwithstanding anything
contained in the sub-clause, continue to be a village industry under this Act

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Chapter :5 – Rural Banking and Finance

Rural Banks act as their agents in remote areas of the country.

They were essentially commercial banks but with some cooperative
characteristics. They provide easy-term loans and financial services to small
or sidelined farmers living in far-off rural areas of the country.

Credit Co-Operative Societies :

A credit cooperative society is a society which takes care of the welfare of society. These
societies are there to help you out with financial support. The primary role played by the
credit cooperative society is that it safeguards the rights of producers and consumers in
Rural areas. They acquire deposits from the members of the society and remove any
middlemen making profits in business and trade. They provide home loan, personal loan,
vehicle loan to the members at a lower and reasonable rate of interest.

There are primarily three Credit Cooperative Society that is

• Primary Credit Cooperative Society

• Central Credit Cooperative Society
• State Credit Cooperative Society

Primary Credit Cooperative Society

The Primary Credit Cooperative Society are organizations that are borrowers and non-
borrowers working for a specific locality. Membership for the residents helps in business
affairs of the society.

Central Credit Cooperative Society Banks

Members of bank unions taking care of the primary resources of societies comprise of
Central Credit Cooperative Society. People from Central co-operative banks can become
a part of credit co-operative society.

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State Credit Co-operative Society Banks

State credit Co-operative Bank society is formed for saving deposits with the help of the
contribution of wealthy urbans. They are middlemen between the joint-stock banks and
the cooperative associations.

Regional Rural Bank :Regional Rural Banks (RRBs) are government owned
scheduled commercial banks of India that operate at regional level in different states
of India. These banks are under the ownership of Ministry of Finance , Government of
India. They were created to serve rural areas with basic banking and financial services.
However, RRBs also have urban branches.

Functions of Regional Rural Bank :

• To provide basic banking facilities to rural and semi-urban areas.
• To bring in social equity by providing financial services to every
stratum of society.
• To provide other bank-related facilities such as locker facility, internet
banking, mobile banking, debit a credit card, etc.
• Grant credit facilities to people in rural areas, such as small farmers,
artisans, small entrepreneurs, etc.
• To accept deposits from people.

NABARD :

NABARD : National Bank For Agriculture and Rural

Development

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Role of NABARD :
1. It is an apex institution which has power to deal with all matters concerning
policy, planning as well as operations in giving credit for agriculture and other
economic activities in the rural areas.

2. It is a refinancing agency for those institutions that provide investment and

production credit for promoting the several developmental programs for rural
development.

3. It is improving the absorptive capacity of the credit delivery system in

India, including monitoring, formulation of rehabilitation schemes,
restructuring of credit institutions, and training of personnel.

4. It co-ordinates the rural credit financing activities of all sorts of institutions

engaged in developmental work at the field level while maintaining liaison
with Government of India, and State Governments, and also RBI and other
national level institutions that are concerned with policy formulation.

5. It prepares rural credit plans, annually, for all districts in the country.

6. It also promotes research in rural banking, and the field of agriculture and
rural development.

Microfinance Institutions :

Microfinance institutions (MFIs) are financial companies that provide

small loans to people who do not have any access to banking facilities. The
definition of “small loans” varies between countries. In India, all loans that
are below Rs. 1 lakh can be considered as microloans.

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Functions of Microfinance Institutions :

1. Small Loans
2. Informal Investment
3. Access to repeat Larger Loan
4. Secure Saving Product
5. To Proovide Financial Facilities
6. To Accept Deposit.

Importance of Microfinance Institutions :

1. Financial Admittance
2. Security
3. Employment Creation
4. Saving
5. Economic Growth
6. Social Wellbeing
7. Women Empowerment

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Chapter :6 – Rural Infrastructure

Typically, rural infrastructure in the country encompasses rural roads,

major dams and canal works for irrigation and drainage, rural housing, rural water
supply, rural electrification and rural telecommunication connectivity. Importance of
rural infrastructure in India.

Educational Infrastructure :

Rural education is the driving force for social change and transformation.
The ongoing pandemic has led to several disruptions in the education system
with the shift to digital learning.This can be accomplished only when
communities, regulatory authorities, corporates and educational institutions
take collaborative measures to work towards sustainable development goals of
education in villages.

An education system in rural communities has the opportunity to build

capacity and knowledge in the rural populace, helping them to make
informed decisions about their farms and to innovate in agricultural
affairs.
Role of Educational Infrastructure :

• Education plays a critical role in rural development

• it is a key factor in developing the people of the rural area, the
community, and the land itself.
• With education, there is always a bright future in store for rural
communities.
• Education is an important factor in bringing about rural
development in any country.
• Education develops leadership
• Employment and income opportunities
• Create new Employment Opportunity

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Health Infrastructure :

Health infrastructure includes advanced machines, specialist doctors,

nurses, and other paramedical professionals and developed pharmaceutical
industries. Generally, it is difficult to describe exactly what good health means.

Rural Health Care System in India

• Population norms for rural healthcare infrastructure.

• Sub Centres (SCs)
• Primary Health Centre (PHC)
• Community Health Centres (CHCs)
• First Referral Units (FRUs)

Housing :

In India, rural housing is provided through Indira Awaas Yojana, a welfare

program of the Government of India.

security and culture of rural society; rural areas largely believe in ownership of
houses, as compared to urban housing where besides living, house is also considered as an
opportunity to generate income by renting out to individuals who come to cities for
study, job, healthcare

Importance of Housing Development in Rural Area

• It Improve Employment
• It Improves Quality of Life
• To Build Connection
• To Build Economy

Sanitation :
The Central Rural Sanitation Programme, which was started in 1986, was one of
India's first efforts to provide safe sanitation in rural areas. This programme focussed
mainly on providing subsidies to people to construct sanitation facilities.

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Role of Sanitation in Rural Area :

• Impact on health : Exposure to contaminated drinking water sources and food with
pathogen-laden human waste is a major cause of diarrhoea, and can be affected by
cholera, trachoma, intestinal worms, malaria, ascariasis, etc. Impact on children
and women
• Impact on children and women : Poor sanitation specially affects children under
age of five, as their immunity is not strong enough yet to fight the many diseases
caused by poor sanitation.
• Impact on environment : Inadequate sanitation and waste management have direct
impacts on the environment. Untreated sewage flowing directly into water bodies
affect coastal and marine ecosystems, contaminate soil and air, exposing millions
to disease.
• Impact on economy : A study by the World Bank says that absence of toilets and
conventional sanitation cost India 6.4% of its GDP in 2006.

Objectives of Sanitation in Rural Area :

a) Bring about an improvement in the general quality of life in the rural areas, by .
Promoting cleanliness, hygiene and eliminating open defecation
b) Accelerate sanitation coverage in rural areas to achieve the vision of Swachh .
Bharat by 2 nd October 2019
c) Motivate communities and Panchayati Raj Institutions to adopt sustainable .
Sanitation practices and facilities through awareness creation and health education
d) Encourage cost effective and appropriate technologies for ecologically safe and .
Sustainable sanitation
e) Develop, wherever required, community managed sanitation systems focusing on .
Scientific Solid & Liquid Waste Management systems for overall cleanliness in the
. Rural areas
f) Create significant positive impact on gender and promote social inclusion by .
Improving sanitation especially in marginalized communities

Drinking Water Supply :

Sources of drinking water. Rural people have to use multi-sources due to the
lack of a stable water supply system in the villages. Households usually classify them
based on their purpose for using water [26]. For instance, tap water for drinking, wells for
hygiene, rainwater and thawed water for garden irrigation

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Water Sources

The primary sources of drinking water are groundwater and surface water. In
addition, precipitation (rain and snow) can be collected and contained. The
initial quality of the water depends on the source. Surface water (lakes,
reservoirs, streams, and rivers), the drinking water source for approximately
50% of our population, is generally of poor quality and requires extensive
treatment.

Drinking water System in rural areas

Rural Transport and Communication :

Rural Transport is the prime indicator of development of any rural

area and Sundarbans is no exception. Types of road, road length, condition of
the road etc. are very important parameters to judge the accessibility of any
region. Therefore, length of road among all the blocks of Sundarbans
was compared.

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communication for rural development as a significant aspect of agricultural

and rural development are sorely needed. Efforts in this direction are being made, but
governments have yet to recognize fully the potential of this factor in promoting
public awareness and information on agricultural innovations, as well as on the
planning and development of small business, not to mention employment
opportunities and basic news about health, education and other factors of concern to
rural populations, particularly those seeking to improve their livelihoods and thereby
enhance the quality of their lives.

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Rural Electrification :

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Rural electrification is the process of bringing electrical power to rural and

remote areas. Rural communities are suffering from colossal market failures as the
national grids fall short of their demand for electricity.

Rural electrification with the use of renewable energies or hybrid systems

improves individual quality of life, facilitates community services such as health and
education (consumption use) and enables business entities to carry out professional
activities (productive use) for rural populations. All of these benefits are possible without
creating unintended negative consequences for local ecosystems and the global climate.

Importance of Solar Energy in Agriculture

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Unit – 3 Governance and Development Programmes
Chapter :7 Rural Development Programmes

• Wage Employment Programmes

• Self-employment and Entrepreneurship Development
Programmes
• Rural Housing Programmes
• Rural Sanitation Programmes

Wage Employment Programmes :

Wage employment includes any salaried or paid job under contract (written or not) to
another person, organization or enterprise in both the formal and informal economy.
People with disabilities often face many barriers to finding decent wage employment;
however, access to wage employment should always be considered an option for people
with disabilities interested in work.

Government Initiatives for Employment Generation in India

The initiatives undertaken by the government of India since independence for employment
generation are:

1. Nehru Rozgar Yojana

2. National Food for Work Programme
3. Training of Rural Youth for Self-employment
4. National Rural Employment Programme
5. Rural Landless Employment Guarantee Programme
6. Jawahar Rozgar Yojana
7. Rural Employment Generation Programme
8. Prime Minister’s Rozgar Yojana For Educated Unemployed Youth
9. Swarna Jayanti Shahari Rozgar Yojana
10. Swarnjayanti Gram Swarozgar Yojana
11. Sampoorna Grameen Rozgar Yojana
12. National Rural Employment Guarantee Scheme
13. Employment Assurance Scheme
14. Deen Dayal Upadhyaya Grameen Kaushalya Yojana
15. Deendayal Antyodaya Yojana - National Urban Livelihoods Mission
16. Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

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Self-employment and Entrepreneurship Development Programmes :

Entrepreneurship Development Programme (EDP) is a programme which

helps in developing entrepreneurial abilities. The skills that are required to run a business
successfully is developed among the students through this programme.. This programme
is perfect for them. This program consists of a structured training process to develop an
individual as an entrepreneur. It helps the person acquire the skills and necessary
capabilities to play the role of an entrepreneur effectively.

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National Institute of Entrepreneurship and Small Business Development (NIESBUD) —

an autonomous organisation under the Ministry of Skill Development and
Entrepreneurship (MSDE) signed a memorandum of understanding (MoU) with the
Ministry of Rural Development (MoRD) to develop a sustainable model for promoting
entrepreneurship at the grass roots by initiating the Start-up Village Entrepreneurship
Programme (SVEP).

SVEP is a sub-component of Deendayal Antyodaya Yojana – National Rural Livelihoods

Mission (DAY-NRLM) of the Ministry of Rural Development. It aims to support
entrepreneurs in rural areas to set-up enterprises at the village-level in non-agricultural
sectors. The partnership will enable the rural community by helping them set up their
trades and provide complete support till they are stabilized. This pragmatic intervention
will provide knowledge, advisory and financial support to the public and will help create
village-level community cadre.

Under the partnership rural entrepreneurs will be able to access banking systems for
receiving financial support for starting their enterprises, including support from MUDRA
bank. Integrated ICT techniques and tools will also be provided for training and capacity
building along with enterprise advisory services to augment the entrepreneurship
ecosystem in India’s villages. The beneficiaries of the project are from the Self-Help
Group (SHG) ecosystem of DAY-NRLM and the scheme not only supports existing
enterprises but new enterprises as well.

Rural Housing Programmes :

Indira Awas Yojana (IAY)

This scheme was started in the early 1980s and executed under the Ministry of Rural
Development. Rural Housing Scheme started with Indira Awas Yojana (IAY) in January 1996.
Its goal is the development of free houses to members of the Scheduled Castes (SC)/Scheduled
Tribes (ST), Freed Bonded Labourers in rural areas and also to non-SC/ST rural poor living
below the poverty line. The beneficiaries are selected from the Below Poverty Line (BPL) list
approved by the Gram Sabha. In June 1985, the Union Finance Minister declared that a part of
the funds of the Rural Landless Employment Guarantee Program (RLEGP) was kept to give
shelter to the SC/ST and Bonded Labourers.
District rural development agencies/Zilla Parishads will determine the panchayat-wise number
of houses to be constructed under Indira Awas Yojana (IAY) during a particular financial year
based on the allotments made and the targets set for the scheme.

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Pradhan Mantri Gram Sadak Yojana (PMGSY)

Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched in 2000 to offer all-weather road
access to unconnected homes. PMGSY is a 100% centrally sponsored scheme. The funding
pattern has been updated to 60% central share and 40% state share from 2015-16 onwards. This
program’s goal is to give round-the-year connectivity by all-weather roads with necessary
channels and cross drainage systems.

Pradhan Mantri Awas Yojana (Gramin)

The Pradhan Mantri Awas Yojana Gramin (PMAY-G) was earlier known as the Indira Awas
Yojana. It was renamed in March 2016 with a motive to improve the convenience and
affordability of housing for rural India.
The world’s largest housing scheme PMAY-G was launched by Prime Minister Narendra Modi
on 20th November 2016 from Agra (UP). The new scheme replaced and restructured the Indira
Awas Yojana (IAY), launched in 1985 by then PM Rajiv Gandhi. The main objective of the
scheme is to develop 1-crore pucca houses in rural areas by 31st March 2019. The scheme
would be applicable to all rural areas of India except Delhi and Chandigarh. The scheme is
connected to MGNREGA by giving 90 days of labour to the beneficiary under MGNREGA.
Under PMAY, the cost of the unit is to be shared between Central and State Governments in the
60:40 ratio in plain areas and 90:10 ratio for North Eastern and hilly states.

Rajiv Awas Yojana

Rajiv Awas Yojana was launched on the purpose of ‘Slum Free India’ where every citizen has
access to basic social amenities, basic shelter, and civic infrastructure. The main objective of
Rajiv Awas Yojana (RAY) is to encourage States/Union Territories to bring all existing slums
under the legal system and allow them to avail of the basic amenities that are available for the
rest of the people in the state or UT.

Pradhan Mantri Awas Yojana

Pradhan Mantri Awas Yojana (PMAY) is a government-initiated scheme in the country that intends to
provide affordable housing for the weaker sections to ensure “Housing for All by 2022’’. Started on
25th June 2015, PMAY intends to build 2 crore houses in a phased manner through the financial support
of Rs 2 trillion from central government across the country for the urban poor by 31st March 2022.
Depending on the areas that it provides, this Housing Scheme has two components – Urban (U) and
Gramin (G).
This scheme is converged with other schemes to make sure that every house has toilets, electricity
connection under Saubhagya Yojana, LPG Gas connection under Ujjwala Yojana, drinking water, and
Pradhan Mantri Jan Dhan Yojana banking facilities, etc.

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State-run Housing Schemes

About 15 states and union territories (UTs) have collectively launched rural housing schemes in the
country and successfully constructed 27 lakh houses during the period 2001 to 2005. States which have
their own schemes include Gujarat, Jammu & Kashmir, Himachal Pradesh, Daman & Diu, Pondicherry,
Punjab, Sikkim, Jharkhand, etc. In Delhi, the state-run housing scheme is known as DDA Housing
Scheme, in Haryana, HUDA Housing Scheme, in Navi Mumbai, CIDCO Lottery Housing Scheme, in
Mumbai, MHADA Lottery Scheme while in Karnataka, it is known as Karnataka Housing Scheme.

Rural Sanitation Programmes :

Rural sanitation model requires both financial assistance and an integrated water
supply. Rural sanitation: a charter of demands, need for rural sanitation programme.
Platform for Indian views. Independent Content. Sign Up For Updates. Social Impact in
India.

Concept of Rural Sanitation :

The concept of sanitation broadly includes liquid and solid waste disposal,
personal and food related hygiene and domestic as well as environmental
hygiene.

Rural sanitation is a state subject. The state governments implement the rural
sanitation programme under state sector Minimum Need Programme (MNP).
The central government supplements their efforts providing financial and
technical assistance through the centrally sponsored Rural Sanitation
Programme (CRSP).

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Chaptter 8 – Rural Markets

Meaning of Rural Markets :

Rural market covers all marketing activities ascertain the demand, product
planning, distribution and facilitating the entire marketing process, with aim of
satisfaction of rural consumer. Rural market includes all business activities which
involved in flow of goods and services from producers to rural consumers.

Rural market offers growth opportunities as the urban markets are increasingly becoming
competitive and in many products even getting saturated. Now income level and standard
of living is increasing rapidly in rural areas. The demand of branded products is also
increasing.

Types of Rural Markets :

Rural markets of India can be broadly categorised into three types.

Type 1. Periodic Markets:

Periodic markets are the important characteristic feature of the rural marketing in India.
In spite of urbanisation and development of retail stores, periodic markets are also
playing an important role in rural economy as well as in social life of the rural masses.
The periodic marketing function is performed by two institutions, viz., fairs, and weekly
markets.

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Type 2. Mobile Traders:

There is another important agency known as mobile traders to fulfill the limited needs
like vegetables, fruits, clothes, utensils, cosmetics, spices, toiletries etc. of rural
consumers. The practice of mobile trading is not a new one, but even in ancient India this
phenomenon was common.

The mobile traders are those merchants who move from one place to another, from one
house to another in order to sell those commodities which are often required by rural
masses. As it is rightly observed by Stine, important reason for the existence of mobile
trader is that when the maximum range is smaller than the threshold requirement of the
firm, the firm either ceases to function or else it becomes mobile.

Type 3. Permanent Retail Shops:

Permanent retail shops are developed as the population of villages increased, their
incomes improved, the demand for goods and that too on daily basis increased. The
traditional fairs, weekly markets or peddlers were not able to meet the situation and this
led to the emergence and growth of permanent shops.

Permanent shops were set up as a result of the demand of the rural inhabitants primarily
of the same village. The number of shops, their various forms largely depends upon the
size of the population of the village, their incomes, purchasing power, their preferences,
etc.

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Defects or Challenges and Government Measures for Removal of Defects in
rural markets

Government Measures for Removal of Defects in rural markets :

• Providing Proper Transpotation

• Creating Market Opportunity
• Providing Funds or Loans for Business
• Create Awareness Among Rural Market
• Provide proper education.
• Provide proper health measures.
• Giving Importance to Jilla Panchayath
• Proivde better opportunities to Rural Communities

Co-operative Marketing Societies

In a co-operative marketing society, the control of the organization is in the

hands of the farmers, and each member has one vote irrespective of the number of
shares purchased by him. The profit earned by the society is distributed among the
members on the basis of the quantity of the produce marketed by him.

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Regulated Markets :

A regulated market is a market over which government bodies or, less

commonly, industry or labor groups, exert a level of oversight and control. Market
regulation is often controlled by the government and involves determining who can enter
the market and the prices they may charge.

A regulated market (RM) or coordinated market is an idealized system where

the government or other organizations oversee the market, control the forces of supply
and demand, and to some extent regulate the market actions.

Importance of Regulated Markets :

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Digital Marketing :

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(e-NAM)

e-NAM Overview
National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC
mandis to create a unified national market for agricultural commodities.

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Chapter :9 - Rural Governance

Rural governance is a product of contemporary influences and the
economic, social, and political history of a particular rural region.

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sources of revenue of Panchayat Raj Institutions
The panchayats' resources come from

(i) the Finance Commission's devolution of the Union Government's taxes and
recommended grants from the Union Government,
(ii) State Finance Commission's grants from State Governments, and
(iii) their own revenues, which include both tax and non-tax revenue.

Role of NGOs in rural development :

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NGOs and Rural Development in India:
In India, the scope of development is not narrow but very wide, as it includes not just the
economic development but the growth on social front, quality of life, empowerment,
women and child development, education and awareness of its citizens. The task of
development is so huge and complicated that just implementing government plans is not
sufficient to fix the problem. To achieve this, a holistic vision and collaborative efforts
involving various departments, agencies and even NGOs is required. Owing to such a great
need, the number of NGOs in India is increasing rapidly and, at present, there are about
25,000 to 30,000 active NGOs in India.

Superficially, rural development seems to be a simple task but, in reality, it is not. Post-
Independence era has seen many rural development programmes through different five-
year plans. Alleviating poverty, employment generation, more opportunities for generating
income, and infrastructure facilities are emphasized through the policies and programmes
of the government. Along with this, the panchayat raj institutions have also been initiated
by the government to strengthen the democracy at grass roots level. But in spite of all the
efforts rural poverty, unemployment rate, low production still exists. The fight is still on
for the basic facilities such as livelihood security, sanitation problem, education, medical
facilities, roads, etc. Still there is a huge gap in terms of infrastructure that is available in
urban and rural areas. The basic rural development should include all these apart from
employment, proper water supply and other basic facilities.

NGOs or Non-Governmental Organizations have more benefits of working in rural areas

as compared to governmental organizations because NGOs are more flexible, NGOs are
specific to a particular locality and moreover these are committed towards serving the
public and community as a whole. As the task of development is massive, many NGOs are
playing vital role in the rural development of India in collaboration with the government.

People’s participation in rural development

People's participation in rural development is an educational process. It is a

training for development involving people in the projects, making them their own. It
is to create a sense of awareness, a sense of participation, a sense of belonging, a sense of
possession and ownership.

People and their participation. Who are the people? The people in general comprise the
target population, the clientele, the beneficiaries, the men and women, the old and the
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young, the formal and informal leaders in the community, people of different segments
and strata of the community, depending upon the specific development programmes and
activities.

In view of the nature of rural development programmes, most of them initiated

by the development agencies, the participation of people could be as diverse as follows:

— Responding to the programme, accepting the idea, the process and adopting the
technology and innovations.
— Extending moral support
— Participation in decision making, cooperating in implementation
— Contribution of money, material and labour
— Taking initiative, mobilising people and resources, and
— Assuming leadership and ownership of projects

Why Should People Participate?

There is a body of philosophy and a set of assumptions behind people's

participation in rural development. We may briefly look into them.

1. The whole philosophy of rural development is based on one very simple and
apparent assumption that the government machinery, however, big and efficient it might
be, is grossly inadequate by itself to achieve the economic and social revolution needed
for ensuring a better and richer life for the vast masses of humanity living in the rural
areas. The rural development personnel were to function merely as 'catalytic agents'. The
idea was that a programme started as a government programme with people's
participation should gradually and eventually shape itself into a people's programme with
government's participation.

2. Communities can develop their own capacity to deal with their problems, (we
assume that people do want and can change).

3. People participate in giving direction to social change in their communities.

Change which is brought about by sharing of an effort and social participation, possesses
democratic vitality and is also realistic. Self-imposed changes have permanence as
compared to those imposed from outside and above.

4. Holistic approach is better than fragmented approach, because the life of a

community is itself a whole and any attempt to tackle one aspect of the whole is bound to
affect others.

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5. People must learn participative skills in democracy because, unless they
themselves share responsibilities and participate in fulfilling them, they do not strengthen
the democratic structure of their society. Democracy will weaken, if not perish, unless the
supporting institutions are created. The basic plank of community development is the
growth of the democratic idea. Democracy does not function unless there is a
decentralisation of power to be shared very widely at various levels of the social strata.

6. People need help in solving their new problems. External help provides stimulus
to inner resources of the community. Communities are like infants who need a prop while
they learn to walk. This is the rationale for agency functioning and agency support.

7. The tendency of sub-groups, developing themselves as separate entities inside a

community, produces social tension and has, therefore, to be channelised. Their energies
have to be diverted to activities of common interest.

8. The barriers that prevent active participation by individuals in the direction of

social change inhibit personal development. The process of community development is,
therefore, to be so organised that the community functions for the good of the individual
and the growth of the community. The communities have to be so organised that they
promote the growth of individuals.

9. The process of urbanisation has destroyed the feeling of belonging to a

community and it is necessary to revive this feeling in rural areas where the masses of
agricultural populations of the developing countries dwell. The contractual relations of an
urban society do not work well in a rural society. The problem of developing and
maintaining common and shared values, which form the basis for cohesion in a
community, is made vastly more difficult by industrialisation

S.E.T Degree College By. Ast.Prof. HEMANTHA KUMARA V