RURAL DEVELOPMENT - NCERT

1 99 RURAL DEVELOPMENT After studying this chapter, the learners will understand RURAL DEVELOPMENT and the major issues associated with it appreciate how crucial the DEVELOPMENT of RURAL areas is for India s overalldevelopment understand the critical role of credit and marketing systems in ruraldevelopment learn about the importance of diversification of productive activities tosustain livelihoods understand the significance of organic farming in ECONOMIC INTRODUCTIONIn Chapter 4, we studied how povertywas a major challenge facing India. Wealso came to know that the majorityof the poor live in RURAL areas wherethey do not have access to the basicnecessities of is the major source oflivelihood in the RURAL sector. MahatmaGandhi once said that the real progressof India did not mean simply the growthand expansion of industrial urbancentres but mainly the DEVELOPMENT ofthe villages.

2 This idea of villagedevelopment being at the centre of theoverall DEVELOPMENT of the nation isrelevant even today. Why is this so?Why should we attach such significanceto RURAL DEVELOPMENT when we seearound us fast growing cities with largeindustries and modern informationtechnology hubs? It is because morethan two-third of India s populationdepends on agriculture that is yet tobecome productive enough to providefor them; one-fourth of RURAL India stilllives in abject poverty. That is thereason why we have to see a developedrural India if our nation has to realisereal progress. What, then, does ruraldevelopment imply? WHAT IS RURAL DEVELOPMENT ? RURAL DEVELOPMENT is a comprehensiveterm. It essentially focuses on action forthe DEVELOPMENT of areas that arelagging behind in the overalldevelopment of the village of the areas which arechallenging and need fresh initiativesfor DEVELOPMENT in RURAL India include DEVELOPMENT of human resourcesincluding literacy, more specifically, femaleliteracy, education and skilldevelopment health, addressing both sanitationand public health Land reforms DEVELOPMENT of the productiveresources of each locality Infrastructure DEVELOPMENT likeelectricity, irrigation, credit,marketing, transport facilitiesincluding construction of villageroads and feeder roads to nearbyhighways, facilities for agricultureresearch and extension.

3 Andinformation dissemination Special measures for alleviationof poverty and bringing aboutsignificant improvement in the livingconditions of the weaker sectionsof the population emphasisingaccess to productive employmentopportunitiesAll this means that people engagedin farm and non-farm activities inrural areas have to be provided withvarious means that help them increasethe productivity. They also need to begiven opportunities to diversifyinto various non-farm productive Only the tillers of the soil live by the right. The rest form their train and eatonly the bread of dependence .Thiruvalluvar2021-22101 RURAL DEVELOPMENT activities such as food them better and moreaffordable access to healthcare,sanitation facilities at workplaces andhomes and education for all would alsoneed to be given top priority for rapidrural was observed in an earlier chapterthat although the share of agriculturesector s contribution to GDP was on adecline, the population dependent onthis sector did not show any significantchange.

4 Further, after the initiation ofreforms, the growth rate of agriculturesector decelerated to about 3 per centper annum during the 1991-2012,which was lower than the earlier recent years, this sector has becomevolatile. During 2014-15, the GVAgrowth rate of agriculture and its alliedsectors was less than one per identify decline in publicinvestment since 1991 as the majorreason for this. They also argue thatinadequate infrastructure, lack ofalternate employment opportunities inthe industry or service sector,increasing casualisation of employmentetc., further impede RURAL impact of this phenomenon can beseen from the growing distresswitnessed among farmers acrossdifferent parts of India. Against thisbackground, we will critically look atsome of the crucial aspects of ruralIndia like credit and marketingsystems, agricultural diversificationand the role of organic farming inpromoting sustainable CREDIT AND MARKETING IN RURALAREASC redit: Growth of RURAL economydepends primarily on infusion ofcapital, from time to time, to realisehigher productivity in agriculture andnon-agriculture sectors.

5 As the timegestation between crop sowing andrealisation of income after production isquite long, farmers borrow from varioussources to meet their initial investmenton seeds, fertilisers, implements andother family expenses of marriage,death, religious ceremonies the time of independence,moneylenders and traders exploitedsmall and marginal farmers andlandless labourers by lending to themon high interest rates and bymanipulating the accounts to keepthem in a debt-trap. A major changeoccurred after 1969 when Indiaadopted social banking and multi-agency approach to adequately meetthe needs of RURAL credit. Later, theWork These Out On a monthly basis, go through thenewspapers of your region andidentify the problems raised bythem in relation to RURAL areas andthe solutions offered. You could alsovisit a nearby village and identifythe problems faced by people this in the classroom.

6 Prepare a list of recent schemesand their objectives from thegovernment website Collect the detailsof how anyone of these schemesimplemented in your resion/ruralneighbourhood areas. Discuss yourobservations in ECONOMIC DEVELOPMENTBox : The Poor Women s Bank Kudumbashree is a women-oriented community-based poverty reductionprogramme being implemented in Kerala. In 1995, a thrift and credit societywas started as a small savings bank for poor women with the objective toencourage savings. The thrift and credit society mobilised Rs 1 crore as thriftsavings. These societies have been acclaimed as the largest informal banks inAsia in terms of participation and savings : Visit this website and explore various other initiativesundertaken by this organisation.

7 Identify some factors which contributed totheir successes and discuss in the Bank for Agriculture andRural DEVELOPMENT (NABARD) was setup in 1982 as an apex body tocoordinate the activities of allinstitutions involved in the ruralfinancing system. The GreenRevolution was a harbinger of majorchanges in the credit system as it led tothe diversification of the portfolio ofrural credit towards production-oriented institutional structure of ruralbanking today consists of a set ofmulti-agency institutions, namely,commercial banks, regional ruralbanks (RRBs), cooperatives and landdevelopment banks. They are expectedto dispense adequate credit at cheaperrates. Recently, self - help Groups(henceforth SHGs) have emerged to fillthe gap in the formal credit systembecause the formal credit deliverymechanism has not only proveninadequate but has also not been fullyintegrated into the overall RURAL socialand community DEVELOPMENT .

8 Sincesome kind of collateral is required, vastproportion of poor RURAL householdswere automatically out of the creditnetwork. The SHGs promote thrift insmall proportions by a minimumcontribution from each member. Fromthe pooled money, credit is given to theneedy members to be repayable insmall instalments at reasonable interestrates. By May 2019, nearly 6 croreWork These Out In your locality/neighbourhood, you might notice self - help groups providingcredit. Attend few meetings of such self - help groups. Write a report on theprofile of a self - help group . The profile may include when it was started,the number of members, amount of savings and type of credit they provideand how borrowers use the loan. You might also find that those who take a loan for starting self -employmentactivities but use it for other purposes.

9 Interact with few such the reasons for not starting self employment activities and discussin the DEVELOPMENT women in India have become memberin 54 lakh women SHGs. About ` 10-15,000 per SHG and another ` lakhsper SHG as a Community InvestmentSupport Fund (CISF) are provided as partof renovating fund to take up selfemployement for income credit provisions are generallyreferred to as micro-credit have helped in the empowermentof women. It is alleged that the borrowingsare mainly confined to consumptionpurposes. Why are borrowers notspending for productive purposes? RURAL Banking a CriticalAppraisal: Rapid expansion of thebanking system had a positive effect onrural farm and non-farm output,income and employment, especiallyafter the green revolution it helpedfarmers to avail services and creditfacilities and a variety of loans formeeting their prodution needs.

10 Faminesbecame events of the past; we have nowachieved food security which is reflectedin the abundant buffer stocks of , all is not well with ourbanking the possible exception of thecommercial banks, other formalinstitutions have failed to develop aculture of deposit mobilisation lending to worthwhile borrowers andeffective loan recovery. Agriculture loandefault rates have been chronicallyhigh. Why farmers failed to pay backloans? It is alleged that farmers aredeliberately refusing to pay backloans. What could be the reasons?Thus, the expansion and promotionof the RURAL banking sector has taken abackseat after reforms. To improve thesituation, In recent years, all the adultsare encouraged to open bank accountsas a part of a scheme known as Jan-Dhan Yojana. Those bank holders canget Rs.