A conceptual idea on developing the rural economy of India

The term rural development connotes overall development of rural areas so as to improve the quality of life of rural people. In this sense, it is a comprehensive and multidimensional concept, and encompasses the development of agriculture and allied activities, village and cottage industries , crafts, socio-economic infrastructure, community services and facilities and above all, human resources in rural areas. As a strategy, it is designed to improve the economic and social well-being of a specific group of people – the rural poor. As a discipline, it is multi-disciplinary in nature, representing an intersection of agriculture, social, behavioral,  and management sciences. 

Today, inclusive rural development must be present which is   about improving the quality of life of all rural   people. More specifically, inclusive rural development covers   three different but interrelated dimensions: Economic dimension, Social dimension and Political dimension.  Economic dimension encompasses providing both capacity and opportunities for the poor and low-income households in particular and benefit from the economic growth. Social dimension supports social development of the poor and low- income households, promotes gender equality, women’s empowerment   and provides social safety nets for vulnerable groups. Political dimension improves the opportunities for the poor and low-income people in rural areas to effectively and equally participate in the political processes at the village level. 

The Issues of the Indian rural economic Environment

The basic issues of the rural economy are related to the economic environment and the non-economic environment.  The non- economic environment consists of the socio-cultural environment, and the political environment.  The economic elements of the rural environment directly put an impact on the Indian business market. Business has to understand the needs of the rural environment and change according to the rural markets so as to  enhance the value to the society. The rural economic environment is a complicated process because it encompasses the rural values, ethics and culture also.

The primary areas to improve should be providing employment in rural areas and improving the productivity of the agricultural sector. Often villages in our countries are not in sync with the urban areas because of bad connectivity. Eventually, this leads to segregation and a social divide between urban and rural areas. In essence, the infrastructure of rural areas should drastically improve. Even after so many years of Independence, stigmas like the caste system still have a grip on rural people.

Quality education can help in achieving the goal of eradication of such social evils. The  literacy rates in rural India, especially for females, are a major matter of concern. There is a need for land and technical reforms. Modern technologies like organic farming should be incorporated to improve outputs and profits. Lastly, people should be given access to easy credit and loans by improving the banking system in rural areas. 

Some areas that need urgent attention for Rural Development in India are:

  1. Public health and sanitation
  2. Literacy
  3. Female empowerment
  4. Enforcement of law and order
  5. Land reforms
  6. Infrastructure development like irrigation, electricity, etc.
  7. Availability of credit
  8. Eradication of poverty

Rural Development Strategies in India:

  • Provide  MSP (Minimum  Support Price)   for various crops to the farmers, apart from providing Crop Insurance.
  • Irrigation facilities to all the agricultural fields should be provided. 
  • Provide Life Insurance to all the farmers who are actually performing agriculture.
  • Instead of giving direct cash in to the hands of farmers, Government has to provide free of cost all required inputs like quality seeds, fertilizers and pesticides etc. 
  • For purchasing Tractors, Electric Motor Water Pumps etc on subsidy, Government should provide loan facility to the farmers.
  • Electricity for farmers should be supplied on subsidy rates.
  • In the event monsoon failure and crop failure due to floods etc, Government must come to the rescue of the farmers.
  • As there are no other activities except agriculture in rural areas, Government must provide  loan facility   to the interested educated youth for starting   Startups to reduce unemployment. 
  • Strengthen and develop existing Agricultural Markets in addition to the establishing new Agricultural Markets.
  • Establish new agricultural godowns in addition to the existing godowns.
  • Agricultural research, extension of rural education and training programmes for farmers should form a part of institution building activities.
  • Infrastructure   building activity related to the growth of irrigation, transport, communications and health facilities.
  • Programmes to improve agricultural production and marketing should be organized.
  • Up dated information on policies related to land tenure, agricultural output, prices etc should be provided to the farmers. 
  • Frequent weaving of agricultural loans for political mileage is not good for the economy as it gives wrong signals to those farmers who repay their agricultural loans promptly

Holistic approach needed for development: 

Economic  development  is a comprehensive  strategy of developing  the agriculture and industries through  technology and education. There is a close link between expansion of farm economic opportunities and development of non-farm sector. In fact, both should be united to augment rural incomes.  For instance, post-harvest operations, maintenance of farm equipment, sustaining agricultural supply chain, land development, conservation of natural resources etc., would not only expand non-farm employment in the rural areas but significantly contribute to increasing agricultural income. 

The allied sectors like livestock, dairy, fisheries, forestry etc.,  not only provide additional incomes for rural households but stabilize livelihoods in the wake of crop failures which is an often occurrence. Strengthening social infrastructure like schools, hospitals, animal health clinics, housing, drinking water, sanitation and other habitat development programmes would strengthen rural human development indicators. 

The following suggestions are listed for the development of rural economy: 

  • Labour Intensive Techniques: As there is disguised unemployment in our agriculture sector, labour intensive techniques should be adopted in rural industrial units.
  • Educate the Rural   Entrepreneurs: Government and NGOs offer various schemes and opportunity to the rural entrepreneurs. But, they are unaware of these schemes and opportunities   due to their illiteracy. So they should to be educated by conducting workshops and seminars related to their business. 
  • Offer finance with low rate of interest: Financial institutions like ICICI, SIDBI, IDBI,IFCI, and SFC should provide finance to rural entrepreneurs with low rate of interest and limited collateral security with liberal terms and conditions. 
  • Government Role: Government should take steps to provide infrastructure, warehousing facilities, offer assistance to marketing and to export the goods of rural entrepreneurs to foreign countries. 
  • Exploration of Village resources: For example, where ever there is scope for wind and solar energy, can be fully explored for rural electrification. 
  • Ancillary units: These are those, which manufacture parts and components to be used by larger industries. Several ancillary units should be established in rural areas which will lead to better productivity of many engineering industries. \
  • Micro credit schemes: Provisions should be made for micro credit system like SHGs to the rural entrepreneurs who will boost up  the economic development and employment generation of the rural poor. Past experiences and other observations should be   considered to develop rural entrepreneurship.  
  • Market information of different products and innovative technology should be publicly announced   by the government in order to get its acceptance among the rural entrepreneurs. 
  • Infrastructure facilities like land, power, raw materials and finance should be provided to the rural entrepreneurs at concessional rates. 
  • Credit Information of the rural entrepreneurs has to be developed so as to enable them to get sufficient amount of loan from the banks at reasonable rate of interest. 
  • SWOT   Analysis:  Strengths,   Weaknesses, Opportunities,   and Threats of small businessmen have     to be identified and properly trained to motivate them to become entrepreneurs.
  • Innovators club should be established in villages to support the large mass of youth who are interested in taking up agriculture as a career. 
  • Marketing management skills should be improved among the rural entrepreneurs to face the problems of entrepreneurship. 
  • Management training is to be imparted to create awareness of innovative spirit among the rural entrepreneurs. 
  • Entrepreneurship development cell should be established at all villages’ level to provide guidance and counseling to motivate the rural entrepreneurs regarding the use of modern technology.  Separate financial fund for rural entrepreneurs should be provided by the Government. At the same time they should be provided with adequate and timely financial assistance from all the financial institutions and banks.
  • Several schemes   and plans of government should be   strongly executed at different levels for the encouragement of rural entrepreneurs. 
  • Establishing agro food processing units or related units   like juice production and many others.

Therefore for rural development, rural initiatives should carefully integrate agriculture, allied sectors, non-farm activities, rural infrastructure and social development. This type of holistic approach would significantly enhance rural livelihoods and income, and also contribute to overall rural development. Calcutta Business School has Rural Immersion Programme as a distinctive feature in its PGDM Programme and every year students go for this as part of their experiential learning.

# Rural Immersion # PGDM Programme # Calcutta Business School 

Dr Suman Kumar Dawn

Principal ( Acting)

Calcutta Business School