CHAPTER-6

RURAL DEVELOPMENT

Majority of poor live in rural area.

Rural area- agriculture is main livelihood (about
2/3rd population depends on it.
Acc. To M.K.Gandhi , Development of villages is
development of nation.

By: Dr. Deepti Gupta

Rural Development
 Development of area lagging behind in overall
development of village economy.
 Literacy, Education, and Skill development.
 Health and public health.
 Land Reforms.
 Productive resources of locality.
 Infrastructure development.
 Alleviate poverty- uplift weaker sections of society.
 Engage people in farm and non-farm activities.
 Share of agriculture to GDP was on decline but
population related to this sector didn’t show any
change.
• Inadequate infrastructure,
• Lack of alternate employment opportunities in
industry or service sector,
• Increasing casualization of employment etc. impede
rural development.
Credit
 Growth of economy is governed by infusion of
capital and higher productivity.
 As gestation time between sowing and real income
is high – farmers need to borrow for initial
investment on seeds, fertilizers, implements and
religious ceremonies.
 At independence, money lenders and traders
exploited small and marginal farmers and landless
labourers by high interest rate and debt trap.
 After 1969, social banking and multiagency
approach for rural credit- NABARD (National
Bank for Agriculture and Rural development) was
set in 1982 to coordinate rural financing system.
 Green Revolution- led to diversification of credit
towards production oriented lending.
 No, RRB (Regional Rural Banks), cooperatives and
land development banks- dispense credit at cheap
rate.
SHGs
 SHGs – fill the gap in formal credit system because
formal credit delivery machanism has not only
proven inadequate- forloans collateral is required
and SHG promotes thrift in small proportions by
minimum contribution from each member- credit is
given from the pooled money (repayable in small
instalments at reasonable interest rate) – micro
credit programs.
Kudumbashree:
 Women oriented community – based poverty
education program implemented in Kerala.
 In 1995, a thrift and credit society was started as a
small savings bank for poor women with the
objective to encourage savings.
 Thrift and credit society mobilized Rs.1 crore as
thrift savings. These societies have been acclaimed
as the largest informal banks in Asia in terms of
participation and savings mobilized.
Rural Banking
 Positive impact on output, income, employment to
avail services and credit.
 Food security as Buffer stocks.
 Except Commercial banks, other formal institutions
failed to develop deposit mobilization (lending to
worthwhile borrowers and effective loan recovery).
 Agriculture loan default rate is high.
Agriculture Market Section
 Involve the assembling, storage, processing,
transportation, packaging and distribution of
different agricultural commodities.
 Farmers who did not had idea of existing price
were forced to sell at lower price.
 Lot of goods were wasted due to storage issues (so
intervention of private traders became must).
Methods of Improving Marketing:
 Regulating market to create orderly transparent
marketing conditions (develop 27,000 rural periodic
markets as regulated markets)
 Provision of physical infrastructure facilities like roads ,
railways, warehouse, godowns, cold storages and
processing units.
 Coorparative marketing for fair prices- received
setback due to inadequate coverage of farmer
members, lack of appropriate link between marketing
and processing cooperatives and inefficient financial
management.
Contd.
 Assurance for Minimum Support Price(MSP)
 Maintain Buffer Stock by FCI
 Distribution of foodgrains anf sugar by PDS.
Alternate Marketing Channels:
 Apni Mandi ( Punjab, Haryana, and Rajasthan)
 Hadaspar Mandi ( Pune)
 Rythu Bazars ( vegetable and fruit markets in
Andhra Pradesh and Telengana)
 Uzhavar Sandies (farmers markets in Tamil Nadu)
 Fast food chains are entering in contract with
farmers to cultivate farm products of desired
quality- provide them seeds, inputs and
procurement at pre-decided prices.
• It reduces price risk of farmers.
• Expands market for farm products.
• Raise income of small farmers.
Diversification into Production
Activities:
 Change in Cropping Pattern.
 Shift of workforce from agriculture to allied activities.
 Provide sustainable livelihood options to rural people (
gainful employment in rabi season when irrigation is
inadequate)
 Non-farm activities- agro- processing industries, food
processing, leather, tourism, meat, egg, wool etc.
 Women in agriculture and men in non-farm activities.
Animal Husbandry:
 Mixed crop livestock farming system- provides stable
income, food security, transport fuel and nutrition
requirements.
 Livestock provides option to 70 million small and
landless labourers ( poultry accounts for 58%)
 2012- India has 300 million cattle, 108 million
buffaloes.
 Milk production increased 8 times from 1951 to 2014
by operation flood
 Improved technology and promotion of good breeds of
animals to enhance productivity
 Improved veterinary care and credit facilities
Fisheries:
 Fishing community considers water as mother or
provider. Inland fish production contribute to 64%
value and 36% to marine sector.
 Total fish production account to 0.8%o total GDP
(major states- West Bengal, Andhra Pradesh,
Kerala, Gujarat, Maharashtra and Tamil Nadu)
 60% workforce in export marketing and 40% in
internal marketing are women in fishery.
Horticulture:
 Fruits, vegetables, tubers, flowers and spices.

 1/3rd of value of agriculture output and 6% of GDP.

 India is leader in Mangoes, Bananas, Coconuts, Cashew
nuts and a number of spices and is the second largest
producer of fruits and vegetables.
 Employment options- Flower harvesting, nursery
maintenance, hybrid seed [roduction and tissue culture,
propagation of fruits and flowers and food processing.
IT-Revolution:
 Sustainble development and food security.
 Tamil Nadu Women in Agriculture (TANWA): project
initiated in Tamil Nadu to train women in latest
agricultural techniques. It induces women to actively
participte in rising agricultural productivity and
family income- In Thiruchirapalli run by
Anthoniammal.
Sustainable Development and
Organic Farming:
 Conventional agriculture relies heavily on chemical
fertilizers and toxic pesticide- harms livestock, deplete
soil and devastate natural ecosystem.
 Organic Farming- whole system of farming that
restores, maintains and enhances the ecological
balance; increasing demand for organically grown food
to enhance food safety.
 Saansad Adarsh Gram Yojana (SAGY): MPs need to
identify and develop one village from constituencies. To
begin with, MPs can develop one village as a model
village by 2016, and two more by 2019, covering over
2,500 villages in India.
Benefits of Organic Farming:

 Substitute costlier agricultural inputs with locally

produced organic inputs which are cheap.
 Income by exports.
 More nutritional valve.
 Requires more labour input.
 Pesticides free and environmentally sustainable
way.
 More blemishes and a shorter shelf life.
 Limited choice in production of off season crops.
 1995:
 Kishan Mehta of Prakruti (an NGO) first suggested
Agency, Tested that cotton, biggest user of chemical
pesticides, could be grown organically. Tested by
German Accredited Agency, AGRECO.