Rural Development
Rural development is a comprehensive process aimed at improving the quality of life
and economic well-being of people living in rural areas. It's a key challenge for
India, as a significant portion of its population resides in villages and depends
on agriculture.
Key Challenges of Rural Development
1. Lack of Adequate Credit and Marketing Facilities: Rural populations, especially
small farmers, often face difficulties in accessing timely and affordable credit.
They also struggle with poor marketing channels, forcing them to sell their produce
at low prices.
2. Insufficient Infrastructure: Rural areas suffer from a lack of basic
infrastructure, including roads, electricity, irrigation facilities, schools, and
healthcare services.
3. Low Agricultural Productivity: Due to dependence on rain, fragmented land
holdings, and lack of modern technology, agricultural productivity remains low.
4. Lack of Diversification of Livelihood: The over-dependence on agriculture makes
the rural economy vulnerable. There is a need to diversify into other non-farm
activities.
5. Poverty and Unemployment: A large portion of the rural population lives below
the poverty line and faces seasonal or chronic unemployment.
Sources of Rural Credit
To address the credit needs of rural areas, a multi-agency approach has been
adopted:
• Institutional Sources: These sources provide credit at a reasonable interest rate
and are regulated by the government.
• Commercial Banks: They provide short-term and long-term loans.
• Regional Rural Banks (RRBs): Set up to provide credit specifically to small and
marginal farmers, agricultural labourers, and artisans.
• Cooperative Credit Societies: Formed by farmers themselves to pool resources and
provide credit to members.
• National Bank for Agriculture and Rural Development (NABARD): The apex body that
coordinates all financial institutions working for rural credit. It provides
refinance facilities to these banks.
• Non-Institutional Sources: These include moneylenders, traders, and landlords.
They often charge very high-interest rates and exploit the poor.
Agricultural Marketing
Agricultural marketing is the process that involves the assembling, storage,
processing, transportation, and distribution of agricultural products from the farm
to the consumer. The government has taken several steps to improve it:
1. Regulated Markets: These markets are managed by a market committee that includes
representatives from the government, farmers, and traders. They ensure fair prices
and transparency.
2. Minimum Support Price (MSP): The government announces MSPs for major
agricultural products to protect farmers from price fluctuations and distress
sales.
3. Cooperative Marketing Societies: These are formed by farmers to collectively
sell their produce, which gives them better bargaining power.
4. Creation of Physical Infrastructure: The government has invested in building
roads, railways, warehouses, and cold storage facilities to reduce wastage.
5. New Initiatives: The government has introduced initiatives like the e-NAM
(National Agriculture Market), an online trading portal for agricultural
commodities.
Diversification of Rural Economy
Diversification is crucial for sustainable rural development. It involves shifting
the workforce from farm activities to non-farm activities and diversifying the
cropping pattern.
• Diversification into Productive Activities:
• Animal Husbandry: A major source of income, providing stable employment.
• Fisheries: Provides a stable income for coastal communities.
• Horticulture: The cultivation of fruits, vegetables, and flowers. India is a
major producer of these products.
• Diversification of Cropping Pattern: Shifting from traditional cereals to high-
value crops like fruits and vegetables, which can provide higher income to farmers.
