Introduction to Rural Economics
The Article deals with the feature of rural development in India and understands the need to develop the rural areas.
And also the problems faced by the villages and initiatives take the Governments to improve the conditions.
Social Sector Problems
1. Village Economics
It deals with the application of principles of economics and developing the life of people in rural areas.
Village economy refers to the economy of the communities or people who live in villages.
The problem faced by the villages is low employment opportunities, poverty, backwardness in agriculture, poor infrastructure, illiteracy, poor labour productivity, surplus labour forces, population, high dependency on natural resources, etc.
As per 2011 population census 6,40,867 villages in India and out 121 crore people 68.84% of people live in villages.
1.2 Features of Rural Economy
a. Village as an Institution
It is a primary institution and it satisfies all the basic needs of rural people and their communities these people have a feeling of belonging and a great sense of unity towards each other.
b. Dependence on Agriculture
Most people are dependent on natural resources, agriculture activities, and allied services of agriculture.
c. Life of Village People
The lifestyles of these people are generally simple, they rely on faith, superstition, and traditional cultural practices.
The basic public services such as education, transport, banking, hospitals, etc are very limited and mostly unavailable. Most of the people are economically poor.
In terms of production, social organization rural sector is extremely weak, and in recent years alcohol drinking and caste killings have gone up.
The people of so-called High, Mid Caste live in village mainland as a single group and SC or so-called lower caste people are forced to live outside the village mainland.
d. Population Density
Population density is generally lower in villages and houses are scattered in villages. Village people generally leave as groups and colonies.
Unemployment is common in villages. There exist seasonal and underemployment in villages. Unemployment is a situation where people with ability and willingness do not find any work.
Underemployment is excess people employed over and above the requirement. Disguise Unemployment is where people work and there is no increase in production.
Underemployment and Disguised Unemployment, both of these exist in village areas.
It is a condition where basic needs such as food, shelter, and clothing are not met. According to the 2011-2012 economic survey, about 22 crore village, people are below the poverty line.
Village people are high indebted owing to poverty and underemployment.
This is due to lack of agriculture and non-agriculture job opportunities, seasonal employment, low wage employment, poor production, poor marketing network, etc.
Since there were no formal loan facilities available to the villagers, they had no way but to lend money from the money lenders who squeeze the villagers.
As a result of these parasites (money lenders) villagers commit suicide.
” An India farmer is born in debt, lives in debt and dies in debt ” stated by a British writer Sir Malcolm Darling (1925)
h. Village Income
The village economy is not vibrant to provide work consistently or self-employment opportunities. A large number of laborers and skilled people are underemployed and the scope of increase of income is limited.
1.3 Rural Development
Rural development is an overall improvement in the social and economic, well-being of villagers.
As per World bank, “Rural Development is a strategy designed to improve the economic and social life of
a specific group of people – rural poor”
In brief, rural development is a process of improving the village areas, their people, and their living.
1.4 Need for Rural Development in India
It is very essential for the overall growth and development of the Indian economy due to the following reasons.
- A major part of the population lives in village and their contribution is essential for nation building.
- By keeping villages backward, India cannot be developed.
- The backwardness of villages has great impact on National economy, as it provides essential commodities such as milk, food and raw materials.
- By improving the village areas in area of education, health and sanitation, can avoid Urban problems such as begging, rack picking and slumming as result of migration from villages.
- Food production and rural employment can increased by developing the agriculture and allied activities in the rural.
- Rural development reduces the evils of brain-drain and urban migration.
- Underutilized resources can be utilized by improving the village economy.
- PURA by former President Abdul Kalam, In terms of infrastructure facilities, the gap between Rural and Urban must be reduced by rural development.
- Human Development Index (HDI), Women Empowerment Index (WEI), Gender Disparity Index (GDI), Physical Quality of Life Index (PQLI) and Gross National Happiness Index (GNHI), these are economic indicator needs to addressed to improve the national status globally.
10.5 Problems of Rural development in India
- People Related Issues– Sentiment and Beliefs, illiteracy, lack of technical knowledge etc are some of the problems.
- Agriculture– Agricultural problems include knowledge, unavailability of inputs, poor marketing of agricultural products, small land holdings, fragmentation of land holding, absence of infrastructure to stay and work in villages, low adoption to modern technologies, lack of investment both public and foreign investments, and fixing of price of own agricultural goods.
- Infrastructure– lack of electricity, water, health, storage, banking and insurance, and educational institutions etc lacking in rural areas.
- Economics- Inability to adapt to technology and inputs, low-income, underprivileged rural industries, indebtedness and inequality in land holding and assets. Also feed landlords owing large area.
- Leadership- Rural people are in the hand of leaders who are incompetent, self-interested and politically biased.
- Administration- Low wages, improper utilization of budget, lack of monitoring body for rural development programmes.
1.6 What is Rural Poverty?
On the basis of food consumption, a person taking less than 2400 calories per day in a rural area is considered as rural poverty.
As Planning Commission estimates, 54.1 % of people live below poverty which accounts for 33.8 % during 2009-2010. Poverty is high among Scheduled Castes (SC) and Scheduled Tribes (ST) in rural areas.
In 2005, SC and ST people accounted for 80 % of the poor in rural although their share in the total rural population is much smaller.
In 2015, 80 crores or more live in villages, and 22 crore people are below the poverty line which is One quarter.
India is home to 22% of the world’s poor.
1.6.1 Causes of Rural Poverty
- Landless agricultural labour , they work in others land to support their families.
- Lack of Non-farm Employment- Due to lack of non-farm employment large number worked are hired for less wages.
- Lack of Public sector Investment- It is root cause of poverty in rural, as Public sector lacks investment in human resource development.
- Inflation- Increase in price affect the power of purchasing in the rural.
- Low Productivity- Large number of people employed for less demanding work and hence paid less and results in less productivity.
- Unequal Benefits of Growth- Urban rich enjoys economic development, due to poor economic structure contributions of poor are not accounted property and their hard work does not improve their financial status.
Ministry of rural Development in India
These are the Rural Welfare Oriented Programmes that are given by the Ministry of rural development. It is one of the ministries of the government of India for planning and providing faster growth in the village or the rural areas.
- Shyama Prasad Mukherji Rurban Mission
It is a centrally sponsored scheme, which was launched in 2016 that is developed to accelerate rural growth. The funding is shared by the state government and central government in the ratio of 40:60. That is 60% by the centre and 40% by the state.
For the Himalayan state and NE state, it is 90% by the centre and 10% by the state.
Under this mission, the Union government at the centre will coordinate with the district administration, to bring the development of urban cities with proper civic amenities to villages and gram panchayats.
Social Welfare Programmes
Ministry of Agriculture and Farmer Welfare
- Pradhan Mantri Fasal Bima Yojana
- Soil Health Card (SHC) Scheme
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
- Pradhan Mantri Kisan Maan Dhan Yojana (PM-KMY)
- Participatory Guarantee Scheme (PGS)
- Schemes to support organic farming in-country
Several ministries of the Union Government of India design different development schemes to improve the benefits or welfare of the people. Some of such schemes are National Rural Livelihood Mission, MGNREGA, etc.