Notes Class 11 Chapter 5 Economics Maharashtra Board

Rural development in India

Introduction

Rural Economy: India’s economy is mainly rural, with villages driving economic growth.
Population: According to the 2011 census, 68.8% of India’s population (83.25 crore) lives in rural areas.
Rural Development: It means improving the quality of life in rural areas through overall development.
Goal: Inclusive and sustainable development to reduce poverty.

What is Rural Development?

Historical Context: Initially focused on agriculture, now includes broader development.
World Bank Definition: A strategy to improve the economic and social life of rural poor, including small-scale farmers, tenants, and landless people.

Sectors Involved:

Agricultural Sector: Includes farming (small, marginal, large farmers) and allied activities (plantation, forestry, fisheries, dairy, horticulture).
Industrial Sector: Small-scale, cottage, and rural industries that process raw materials and manufacture goods.
Service Sector: Provides services like accounting, plumbing, computer services, restaurants, and tourism.

Components of Rural Development

Agriculture:

Mechanization (using machines).
High-yielding seeds.
Credit and transport facilities.
Marketing support.

Village Industries:

Modernization.
Technical training.
Marketing assistance.

Education:

Technical education.
Skill development.
Agricultural education.

Services:

Health facilities.
Family welfare programs.
Banking services.
Communication systems.

Significance of Rural Development

Public Health and Sanitation:

Improves hygiene, safe drinking water, and affordable healthcare.
Enhances quality of life.

Literacy Rate:

Bridges the gap between rural and urban literacy.
Provides educational facilities at all levels.

Empowerment of Women:

Reduces gender disparities.
Encourages women’s participation in community programs.

Law and Order:

Protects rights of socially disadvantaged groups.

Land Reforms:

Implements ceilings on land holdings, regulates rent, and protects tenancy rights.
Reduces rural inequality.

Infrastructure Development:

Improves electricity, roads, and irrigation facilities.

Availability of Credit:

Expands financial institutions like co-operative banks and regional rural banks.
Provides subsidized credit to farmers.

Poverty Eradication:

Increases rural incomes and living standards.

Agricultural Credit in India

Importance: Essential for agricultural growth as rural families often lack savings to fund farming.
Classification of Agricultural Credit:

1. By Tenure:

Short-Term: Loans up to 2 years for fertilizers, seeds, or social ceremonies.
Medium-Term: Loans up to 5 years for land improvements, cattle, or equipment.
Long-Term: Loans over 5 years for tractors or permanent land improvements.

2. By Purpose:

Productive: Loans for agricultural production (e.g., buying tractors, seeds).
Unproductive: Loans for personal consumption (e.g., marriages, ceremonies).

Sources of Agricultural Credit

1. Non-Institutional Sources (40% of total credit):

High interest rates and assets kept as collateral.
Examples:

Money-Lenders: Charge high interest and mortgage property.
Other Private Sources: Traders, landlords, relatives, or friends.

2. Institutional Sources:

Aim to provide timely and adequate credit for small and marginal farmers.
Examples:

NABARD: Apex institution for rural credit, established in 1982. Fully owned by the Government of India since 2018.
Rural Co-operative Credit Institutions:
Short-Term: Primary Agricultural Credit Societies (PACS), District Central Co-operative Banks (DCCB), State Co-operative Banks (SCB).
Long-Term: Primary and State Co-operative Agriculture and Rural Development Banks.
Commercial Banks: Open rural branches to provide credit.
Regional Rural Banks (RRBs): Set up under the RRB Act, 1976, to serve rural poor.
Micro Finance Institutions (MFIs): NGOs provide alternative credit access for small farmers.

Rural Occupational Structure

Agricultural Sector: Farming and allied activities.
Industrial Sector: Processing raw materials and manufacturing.
Service Sector: Services like banking, insurance, and computer-related work.