Rural development

Topic: Rural Development: Diversification, Allied Sectors and Organic Farming · NCERT: Class 11, Ch 5 "Rural Development"

Meaning

Rural development is a broad term for action taken to develop the parts of the village economy that lag behind. It covers six areas: human resources, land reforms, local productive resources, infrastructure, poverty alleviation and access to productive jobs (Class 11 NCERT, Rural Development).

• It matters because most Indians still depend on farming, but farming produces only a small share of the country's output.
• Rural development is broader than agricultural growth. Higher crop output alone does not develop a village. People also need health, education, roads, credit and jobs outside farming.

Explanation

Why villages come first

• Mahatma Gandhi: India's real progress means developing its villages, not only growing its industrial cities.
• Thiruvalluvar (Tamil poet-saint, author of the Tirukkural): "Only the tillers of the soil live by the right. The rest… eat only the bread of dependence." Farmers are the base of the whole economy.

The six parts of the agenda (NCERT)

Area	What it covers	Why it matters
Human resources	Literacy (especially female literacy), education, skills, sanitation and public health	Educated, healthy workers can move into better-paid work
Land reforms	Redistribution of land; tenancy reform	Farmers who own land have more reason to invest in it
Local productive resources	What each area is naturally good at: milk, fish, forests, crafts	Uses local strengths to earn income
Infrastructure	Electricity, irrigation, credit, marketing, village roads and feeder roads (small roads linking a village to a highway), agricultural extension (taking new farm knowledge from research bodies to farmers), information	Lowers costs and connects farmers to markets
Poverty alleviation	Better living conditions for weaker sections	Done through jobs, not only handouts
Productive employment	Work that adds real output and pays enough to lift a worker out of poverty	Gives a lasting way out of poverty

• Diversification: rural people need chances to move into non-farm work, such as food processing, and into allied activities. Allied activities are farm-related work other than growing crops, such as dairy, poultry and fisheries.
• AMUL (a dairy cooperative started in 1946 at Anand, Gujarat) is the classic example of farmers earning more from an allied activity.

The core problem: the structural gap

• Structural transformation: as a country develops, workers move out of farming into industry and services.
• In India, agriculture's share of GDP has fallen fast. The share of people who depend on it has fallen slowly. So too many people share too little output.
• Formula: relative labour productivity of a sector = (sector's share of output) ÷ (sector's share of workers)
• Worked example (about 16% of GDP in FY24 [4]; about 46% of workers, PLFS 2023-24):
• Agriculture: 16 ÷ 46 ≈ 0.35
• Non-agriculture: 84 ÷ 54 ≈ 1.56
• 1.56 ÷ 0.35 ≈ 4.5. A non-farm worker produces about 4.5 times as much as a farm worker.

• Put simply: if 100 workers produce ₹100, the 46 farm workers produce ₹16 (about ₹0.35 each). The 54 non-farm workers produce ₹84 (about ₹1.56 each).

• This is linked to disguised unemployment. More people work on a farm than it needs, so removing some of them would not reduce output.

What slows it down (NCERT's causes of the post-1991 farm slowdown)

• Falling public investment since 1991. NCERT treats this as the main cause.
• The government spent less on irrigation, power, research and extension
• → fewer new assets were built on farms

• → yields rose more slowly

• Inadequate infrastructure: poor roads, storage, irrigation and markets.

• Few alternative jobs in industry or services, so surplus workers stay on farms.
• Growing casualisation: more workers move from regular jobs to casual work (daily-wage work with no contract or security).
• Rule of 70: farm growth was about 3% a year from 1991 to 2012. At that rate, output takes about 70 ÷ 3 ≈ 23 years to double.

In India

• Size of the challenge: NCERT says more than two-thirds of Indians depend on agriculture that is not productive enough, and a quarter of rural India lives in abject poverty (extreme poverty, where basic needs are not met). These are old figures.
• Latest data:
• Agriculture and allied sectors made up about 16% of GDP in FY24 (provisional, current prices) [4].
• About 46% of workers were in agriculture (PLFS 2023-24). PLFS is the Periodic Labour Force Survey, run by NSO under MoSPI.
• The Economic Survey 2024-25 gives average agricultural growth of about 5% a year from FY17 to FY23 [4].
• Real GVA (Gross Value Added: value of output minus inputs used up, such as seeds, fertiliser and fuel) of agriculture and allied sectors grew 1.4% in 2023-24 and an estimated 3.8% in 2024-25 [5].

• Foodgrain production reached a record 3,577.32 lakh tonnes in 2024-25, up 7.65% from 3,322.98 lakh tonnes in 2023-24 [6].

• Saansad Adarsh Gram Yojana (SAGY), NCERT Box 5.3:

• Prime Minister Modi launched it on 11 October 2014, the birth anniversary of Jayaprakash Narayan [2].
• Targets: each MP develops one model village by 2016, two more by 2019, then five more (one a year) by 2024 [2]. NCERT says it covers "over 2,500 villages".
• The unit of adoption is the Gram Panchayat (the elected village council). It should have 3,000-5,000 people in the plains and 1,000-3,000 in hilly, tribal or difficult areas.
• An MP cannot choose their own village or their spouse's village.
• The MP helps villagers draw up a Village Development Plan (VDP). There are no separate funds. The scheme works by convergence, meaning existing Central and State schemes plus MPLADS (a fund each MP can recommend for local works) are brought together in one village.
• Participation fell over time. As of 25 July 2018, only 478 MPs had identified a Gram Panchayat in Phase II and only 218 in Phase III [3]. About 1,782 Gram Panchayats were adopted over the five years up to 2023 [3].
• Nine universities reviewed the Phase-I (2014-16) Gram Panchayats after the work was done [3].

• NCERT's lesson: learn from "best practice" examples through "learning by doing".

• Agrarian distress (the growing crisis among farmers: low income, debt, crop failure and, at worst, suicides). NCRB ADSI 2022:

• 11,290 people in the farming sector died by suicide in 2022. That is 6.6% of all 1,70,924 suicides [7].
• Of these, 5,207 were farmers/cultivators and 6,083 were agricultural labourers [7].
• Of the 5,207 farmers/cultivators, 4,999 were male and 208 female [7].

Don't confuse with

• Agricultural growth: this is only a rise in farm output. Rural development is wider. It also includes health, education, land reform, infrastructure and non-farm jobs.
• Poverty alleviation through handouts: rural development aims at productive employment, meaning jobs that raise output, not only transfers.
• SAGY vs MPLADS: SAGY has no budget of its own. It uses MPLADS money along with other schemes. MPLADS is an actual fund that each MP can recommend for local works.
• Farmers/cultivators vs agricultural labourers: cultivators work their own or leased land. Labourers are landless wage workers. In 2022, labourers made up the larger share of farm-sector suicides [7].

Prelims Hooks

• NCERT calls rural development "a comprehensive term" for developing lagging parts of the village economy. It is broader than agricultural growth.
• SAGY: launched 11 October 2014 (Jayaprakash Narayan's birth anniversary). No separate funds; it works through convergence of existing schemes and MPLADS [2].
• SAGY rules: the unit is the Gram Panchayat. Population norm is 3,000-5,000 (plains) and 1,000-3,000 (hilly/tribal/difficult). The MP's own or spouse's village is not allowed.
• Trap: NCERT names falling public investment as the main cause of the post-1991 farm slowdown. It does not blame private investment or the WTO.
• Trap: in 2022, agricultural labourers (6,083) outnumbered farmers/cultivators (5,207) among farm-sector suicides. The total was 11,290, or 6.6% of all suicides (NCRB ADSI) [7].
• Structural gap: agriculture is about 16% of GDP (FY24) [4] but employs about 46% of workers (PLFS 2023-24). The quote "Only the tillers of the soil live by the right…" is from the Tirukkural.

Mains Points

• Diversification, not only yields (GS-III): farm workers produce about 4.5 times less than non-farm workers (16% of output ÷ 46% of workers). So rural incomes rise faster through dairy, fisheries, food processing and non-farm jobs. AMUL (1946) shows how a cooperative can make an allied activity pay. Human-resource spending (female literacy, health, skills) helps workers make this move.
• Public capital vs subsidies (GS-III): NCERT links the post-1991 slowdown to falling public investment in irrigation, research and extension. Public assets encourage farmers to invest too. Subsidies on fertiliser and power do not build new assets. The case is to shift spending from subsidies to capital works.
• Limits of voluntary, MP-led models (GS-II/III): SAGY costs little and encourages coordination. But only 478 MPs in Phase II and 218 in Phase III had identified villages by 2018 [3]. Planning by the Gram Panchayat under the 73rd Amendment (the Gram Panchayat Development Plan) may last longer. Since landless labourers suffer the most distress, land-linked income support alone misses them. They need MGNREGA-type wage work, skills and non-farm jobs.

Related concepts

• Agrarian distress

Read more

• Rural development: meaning, agenda and the agrarian backdrop