"India lives in its villages" - Mahatma Gandhi.

What is rural development?

Rural development is a comprehensive term. It essentially
focuses on action and initiatives for
the development of areas that are lagging behind in the
overall development of the village economy.
improving the standard of living in non-Urban
neighbourhoods, countryside, and remote villages.
it is concerned with economic growth and social justice
by providing adequate and quality social services and
minimum basic needs
Some of the areas which are challenging and need fresh initiatives
for development of human resources in India include:
Literacy, more specifically, female literacy education
and skill development
Health, addressing both sanitation and public health
Land reforms
Development of the productive resource of each
locality
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.
 Introduction
Literally and from the social, economic and political perspectives
the statement "India lives in its villages" is valid even today.
Around 65% of the State's population is living in rural areas.

People in rural areas should have the same quality of life as is

enjoyed by people living in sub urban and urban areas. Further
there are cascading effects of poverty, unemployment, poor and
inadequate infrastructure in rural areas on urban centres causing
slums and consequential social and economic tensions manifesting in
economic deprivation and urban poverty.

Hence Rural Development which is concerned with economic growth

and social justice, improvement in the living standard of the rural
people by providing adequate and quality social services and
minimum basic needs becomes essential.
The Government's policy and programmes have laid emphasis on

• poverty alleviation
• generation of employment and income opportunities
• provision of infrastructure facilities and basic amenities to
meet the needs of rural poor.

For realising these objectives,

• self-employment and wage employment programmes continue

to pervade in one form or other.
• As a measure to strengthen the grass root level democracy,
the Government is constantly endeavouring to empower
Panchayat Raj Institutions in terms of functions, powers and
finance.
• Grama sabha, NGOs , Self-Help Groups and PRIs have been
accorded adequate role to make participatory democracy
meaningful and effective.
 Goals, Objectives and Strategy
The prime goal of rural development is to improve the
quality of life of the rural people by alleviating poverty
through the instrument of self-employment and wage
employment programmes, by providing community
infrastructure facilities such as drinking water,
electricity, road connectivity, health facilities, rural
housing and education and promoting decentralization of
powers to strengthen the Panchayat raj institutions.

To achieve the above objectives, the following priorities

and thrust areas have been identified during the Tenth
Five Year Plan period:
Monitorable Targets for Tenth Plan

 Reduction of Poverty to 10% by 2006-07 and near elimination

by 2012.

 Formation of 1.25 lakh Self Help Groups.

 Integrated Sanitary Complex for women in all Panchayats by

2003.

 Augmentation of water storage capacity of 12,618 village

panchayat tanks through renovation.

 Training to 63,044 local bodies elected representatives

including SHGs & officials to improve skill and capacity building.
 All weather roads to rural habitations having population above
500 by 2004.
Rural Development in India- Schemes

Pradhan Mantri Gram Sadak Yojana (PMGSY): This is a scheme

launched and fully sponsored by the Central Government of
India. The main objective of the scheme is to connect all the
habitations with more than 500 individuals residing there, in the
rural areas by the means of weatherproof paved roads.

Swarnjayanti Gram Swarozgar Yojana (SGSY): This was

implemented as a total package with all the characteristics of
self employment such as proper training, development of
infrastructure, planning of activities, financial aid, credit from
banks, organizing self help groups, and subsidies. 
 Rural Development in India- Schemes
Sampoorna Gramin Rozgar Yojana (SGRY): This scheme aims at
increasing the food protection by the means of wage
employment in the rural areas which are affected by the
calamities after the appraisal of the state government and the
appraisal is accepted by the Ministry of Agriculture. 

Indira Awaas Yojana (Rural Housing): This scheme puts

emphasis on providing housing benefits all over the rural areas
in the country.
 Credit And Marketing In Rural Areas
As the time gestation between crop sowing and realization of
income after production is quite long, farmers borrow from various
sources to meet their initial investment on seeds, fertilizers,
implement and other family expenses of marriage, death, religious
ceremonies etc.

At the time of independence, moneylenders and traders exploited

small and marginal farmers and landless laborers by lending to them
on high interest rates and by manipulating the accounts to keep
them in 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
National Bank Of Agriculture And Rural Development
(NBARD) was set up in 1982 as an apex body to
coordinate the activities of all institutions involved in
the rural financing system.

The institutional structure of rural banking today

consists of a set of multi-agency institutions, namely,
commercial banks, regional rural banks (RRB’s),
cooperative and land development banks
Rapid expansion of the banking system had a positive effect on
rural farm and non farm output, income and employment, especially
after the green revolution- it helped farmers and a variety of loans
for meeting their production needs.

Recently Self Help Groups (SHG’s) have emerged to fill the gap in
the formal credit system such credit provisions are generally
referred to as Micro Credit Programmes.

SHG’s have helped in the empowerment of women but the

borrowings are mainly confined to consumption purpose and
negligible proportion is borrowed for agricultural purposes.
 AGRICULTURE MARKET SYSTEM
Agricultural marketing is a process that
involves the
assembling,
storage,
processing,
transportation,
packaging,
grading and
distribution
of different agricultural commodities across the
country.
 Measures initiated to improve the
marketing aspect are:

(i) Regulation of markets to create orderly and transparent

marketing conditions. By and large, this policy benefited
farmers as well as consumers.
(ii) 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.
(iii) Cooperative marketing, in realizing fair prices for farmers
product, is 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 to the role of cooperatives.
EMERGING ALTERNATE
MARKETING CHANNELS

It has been realized that if farmers directly sell their produce to

consumers, it increases their share in the price paid by the
consumers.
examples: apni mandi (Punjab, Haryana, Rajasthan);
hadaspar mandi (Pune), etc.

Several national and multinational fast food chains are increasingly

entering into contracts/alliances with farmers to encourage them
to cultivate farm products (vegetable, 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.
Diversification Into Productive Activities
Diversification includes two aspects:
 one relates to diversification of crop production and
 the other relates to a 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 livelihood.
Diversification towards new area is necessary not only to reduce
the risk from agriculture sector but also to provide productive
sustainable livelihood options to rural people.
Therefore expansion into other sectors is essential to provide
supplementary gainful employment .
 Organic Farming

Organic agriculture is a whole system of farming that

restores, maintains and enhances the ecological balance.

Benefits Of Organic Farming:

1) organic agriculture offers a means to substitute costlier

agriculture inputs (such as: HYV seeds, chemical fertilizers,
pesticides etc.) with locally produced organic inputs that are
cheaper and thereby generate good returns on investment.
2) Organic agriculture also generates incomes through
international exports as the demand for organically grown
crops is on a rise.
 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 centers with the urban and foreign (export)
markets to realize higher returns on the investment for
the products.

 Moreover, infrastructure elements like credit and

marketing farmer- friendly agricultural policies and a
constant appraisal and dialogue between farmer’s groups
and state agriculture departments are essential to
realize the full potential of the sector.
 Impact of Global Slowdown
 The global recession has impacted only urban
india,but rural india which mainly depends upon
agriculture which grew by 2.7% in the last quarter
of 2008-09(compared to -1.4 in manufacturing),
had a lesser impact due to global slowdown.

 Because of buying power of rural India, the

economy ,in the fourth quarter of the fiscal year
(Jan-march 2009), grew 5.8%against expectation
of less then 5%.
Global recession and agriculture sector
 Recession will have its positive and negative points.

 The minus points are that there will be job scarcity; retrenchment will be all
time high, liquidity in the market will be low; export market will be severely hit
etc.

 The plus point is that cost of living will come down. things we were exporting
will be forced to be sold locally, bringing the prices down. Real estates which
was out of the reach for the common man will be within reach.

 The agriculture sector is performing well compared to other industries in

recession owing to high food demand, emerging bio - fuel markets and economic
recovery.

 According to the ANNUAL AGRICULTURE OUTPUT REPORT prepared by

Organization Of Economic Cooperation and Development (OECD) and the Food
and Agriculture Organization (FAO) of United Nations, there is no impact of
global economic crisis on agriculture as compared to other sector.
 The average prices of agricultural products in the next 10 yrs are
projected to stay at a cross levels of the decade before 2007-08
peaks.
 Vegetable oil prices are expected to surge by nearly 30%, while crops
prices rise by 10-20%.
 The projected increase in agricultural products prices is likely to stem
from economic recovery, emerging bio –fuel market and food demand
from developing markets. A number of companies are seeking ways to
enhance the crop production to lead the continuously rising food
demand.
 While the scenario varies in terms of commodity, the overall is
expected to perform better on account of recent period of high
incomes and demand for food.
 According to a research analyst and RNCOS, the agricultural sector is
showing strong resistance against the global economic prices compared
to other industries due to consistent strong demand for food products.
Government’s effort through Budget
• The budget pro-poor and pro-rural biases are not surprising. Huge
funds have been allocated for rural programmes that involved rural
job guarantee, food subsidies and farm lending.
• The budget provides for a 144% funding increase over last year
estimate for programmes under the National Rural Employment Act,
to Rs.39,100 crores. Another programme for 2009-2010 ensures that
every poor family will get 25 kg of rice monthly at Rs 3 each.
• The Pradhan Mantri Gram Sadak Yojana has been given a 59% higher
allocation in the budget over that of 2008-09 at Rs 12000 crore.
• Other programmes promise to bring integrated development to
combat caste-based discrimination in villages, housing subsidies for
the poor and other poverty eradication measures.
• Prime Minister Manmohan Singh said the Union Budget 2009-2010 is
aimed at minimizing the impact of global recession and achieving 8-
9%growth in medium terms.
 CONCLUSION
• Despite the severity of global crisis, India’s economy
has demonstrated considerable resilience due to
agricultural sector.
• We managed the crisis of the 90’s but we will manage
the global recession as well.
• With sound and determined economic policies we
should be able to recover a growth momentum of 7-
8% in a year or next another one year.
• THE CHALLENGE FOR OUR POLICIES AND
PROGRAMMES IS TO CONVERT THIS POTENTIAL
INTO PERFORMANCE