Chapter 5 Rural Development – Notes

5.1 Introduction

• Majority of India’s poor live in rural areas lacking basic necessities.
• Agriculture is the main livelihood.
• Mahatma Gandhi emphasized village development as central to national progress.
• Over two-thirds of India’s population depends on agriculture, yet productivity is low.
• Rural development is essential for real progress.

5.2 What is Rural Development?

• Comprehensive term focusing on lagging village economies.
• Key areas:
  • Human resource development (literacy, especially female literacy, education, skills, health, sanitation).
  • Land reforms.
  • Development of productive resources.
  • Infrastructure (electricity, irrigation, credit, marketing, transport, research, information).
  • Poverty alleviation and employment opportunities.
• Agriculture’s GDP share declining, but dependency remains high.
• Issues: inadequate infrastructure, lack of alternate jobs, casualisation of employment, farmer distress.

5.3 Credit and Marketing in Rural Areas

• Credit: Needed due to long gestation between sowing and income.
• Earlier exploitation by moneylenders; reforms brought social banking (1969) and NABARD (1982).
• Institutions: commercial banks, RRBs, cooperatives, land development banks.
• Self-Help Groups (SHGs): Promote thrift, micro-credit, women empowerment.
• Problems: loan defaults, inadequate deposit culture, misuse of loans.
• Jan-Dhan Yojana: Encourages bank accounts, insurance, overdraft, direct benefit transfers.

5.4 Agricultural Market System

• Marketing involves assembling, storage, processing, transport, packaging, grading, distribution.
• Problems: faulty weighing, lack of price info, poor storage → wastage.
• Government measures:
  • Regulated markets.
  • Infrastructure (roads, warehouses, cold storage).
  • Cooperatives (milk cooperatives success).
  • Policy instruments: MSP, buffer stocks, PDS.
• Alternate channels: Apni Mandi, Rythu Bazars, Uzhavar Sandies, contract farming with fast-food chains.
• Debate: government intervention vs. commercialisation.

5.5 Diversification into Productive Activities

• Diversification: Change in cropping pattern + shift to allied/non-farm activities.
• Needed to reduce risk and provide sustainable livelihoods.
• Allied activities:
  • Animal husbandry: Mixed farming system; livestock provides stability. Operation Flood boosted milk production.
  • Fisheries: Inland sources contribute 75%; problems include poverty, underemployment, indebtedness.
  • Horticulture: Fruits, vegetables, spices, flowers; contributes 1/3 of agriculture output and 6% of GDP.
• Other options: IT applications in agriculture, rural employment generation.

5.6 Sustainable Development and Organic Farming

• Conventional farming harms health and environment (chemicals, pesticides).
• Organic farming: Eco-friendly, sustainable, improves soil, water, livestock health.
• Promotes long-term sustainability and food security.

Key Boxes

• Box 5.1: Kudumbashree – women-oriented thrift and credit society in Kerala.
• Box 5.2: TANWA – Tamil Nadu Women in Agriculture project, training women in organic farming and micro-credit.
• Box 5.3: Saansad Adarsh Gram Yojana – MPs adopt villages for development.