Rural Economy

Notes

About two-thirds of India's population lives in rural areas (about 65%; 68.8% in the 2011 Census) and rural India contributes about 46% of national income. Although agriculture dominates, the rural non-farm sector (construction, manufacturing, trade and services) now provides a growing share of rural income and jobs.

Rural credit

A three-tier cooperative structure (PACS at the village, district central and State cooperative banks); NABARD (1982) (on the Shivaraman Committee recommendation) as the apex development bank; Regional Rural Banks (RRBs, 1975); the Lead Bank Scheme; Kisan Credit Card; and the SHG-Bank Linkage Programme (1992). RIDF (1995) finances rural infrastructure.

Employment and livelihoods

MGNREGA (2005); DAY-NRLM (2011) (self-help groups; the Lakhpati Didi target); PM Vishwakarma (2023) for artisans; RSETIs.

Rural infrastructure schemes

PMGSY (2000) (rural roads), PMAY-Gramin (housing), Jal Jeevan Mission (2019) (tap water), Saubhagya (electrification), BharatNet (rural broadband), and SVAMITVA (2020) (drone-based property cards). Sansad Adarsh Gram Yojana (2014) for model villages.

Trends and issues

Distress migration, low productivity, high rural indebtedness, inadequate infrastructure and services, wage stagnation and an informal workforce. The Harris-Todaro model explains rural-urban migration; Gandhi emphasised that India lives in its villages; PURA was proposed by A.P.J. Abdul Kalam.
The consumption gap between rural and urban India is narrowing: the Household Consumption Expenditure Survey 2022-23 shows a monthly per capita spend of about ₹3,773 in rural and ₹6,459 in urban India.

Key Points

About 65% of Indians live in rural areas; non-farm income is rising.
Rural credit: PACS, NABARD (1982), RRBs (1975), SHGs.
Schemes: MGNREGA, NRLM, PMGSY, PMAY-G, Jal Jeevan Mission.
Challenges: distress migration, indebtedness, infrastructure gaps.
The urban-rural consumption gap is narrowing.

MCQs