Rural Development Economic Class 11

Rural Development Economic Chapter 5 Explanation Question and Answer

Rural Development Intoduction

Rural Development class 11 Previously we have studied how poverty was a major challenge facing India. We also know that the majority of the poor live in rural areas where they do not have access to the basic necessities of life. Agriculture is the major source of livelihood in the rural sector.

Mahatma Gandhi once said that the real progress of India did not mean simply the growth and expansion of industrial urban centers but mainly the development of the villages. This idea of village development being at the center of the overall development of the nation is relevant even today. Why is this so?

Why should we attach such significance to rural development when we see around us fast-growing cities with large industries and modern information technology hubs? It is because more than two-thirds of India’s population depends on agriculture which is yet to become productive enough to provide for them; one-fourth of rural India still lives in abject poverty. That is the reason why we have to see a developed rural India if our nation has to realize real progress. What, then, does rural development imply?

What is Rural Development

Rural development is a comprehensive term. It essentially focuses on action for the development of areas that are lagging behind in the overall development of the village economy. Some of the areas which are challenging and need fresh initiatives for development in rural India include:

  • Development of human resources including
  • literacy, more specifically, female literacy, education, and skill development
  • health, addressing both sanitation and public health
  • Land reforms
  • Development of the productive resources of each locality
  • Infrastructure development like electricity, irrigation, credit, marketing, and transport facilities including construction of village roads and feeder roads to nearby highways, facilities for agriculture research and extension, and information dissemination
  • Special measures for alleviation of poverty and bringing about significant improvement in the living conditions of the weaker sections of the population emphasizing access to productive employment opportunities

All this means that people engaged in farm and non-farm activities in rural areas have to be provided with various means that help them increase productivity.

They also need to be given opportunities to diversify into various non-farm productive activities such as food processing. Enabling them better and more affordable access to healthcare, sanitation facilities at workplaces and homes, and education for all would also need to be given top priority for rapid rural development.

Rural Development class 11 It was observed in an earlier chapter that although the share of the agriculture sector’s contribution to GDP was on a decline, the population dependent on this sector did not show any significant change. Further, after the initiation of reforms, the growth rate of the

agriculture sector decelerated to about 3 percent per annum from 1991-2012, which was lower than in the earlier years. In recent years, this sector has become volatile. During 2014-15, the GVA growth rate of agriculture and its allied sectors was less than one percent. Scholars identify the decline in public investment since 1991 as the major

Credit and Marketing In Rural Areas

Credit: Growth of rural economy depends primarily on the infusion of capital, from time to time, to realize higher productivity in agriculture and non-agriculture sectors. As the time gestation between crop sowing and realization of income after production is quite long,

farmers borrow from various sources to meet their initial investment in seeds, fertilizers, implements, and other family expenses of marriage, death, religious ceremonies, etc.

At the time of independence, moneylenders and traders exploited small and marginal farmers and landless laborers by lending to them at high interest rates and by manipulating

the accounts to keep them in a debt trap. A major change occurred after 1969 when India adopted social banking and a multi-agency approach to adequately meet the needs of rural credit. Later, the

Rural Development class 11 Explanation

National Bank for Agriculture and Rural Development (NABARD) was set up in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system. The Green Revolution was a harbinger of major changes in the credit system as it led to the diversification of the portfolio of rural credit towards production-oriented lending.

The institutional structure of rural banking today consists of a set of multi-agency institutions, namely, commercial banks, regional rural banks (RRBs), cooperatives, and land development banks. They are expected to dispense adequate credit at cheaper rates. Recently, Self-Help Groups (SHGs) have emerged to fill the gap in the formal credit system because the formal

credit delivery mechanism has not only proven inadequate but has also not been fully integrated into the overall rural social and community development. Since some kind of collateral is required, a vast proportion of poor rural households were automatically out of the credit network.

The SHGs promote thrift in small proportions with a minimum contribution from each member. From the pooled money, credit is given to the needy members to be repayable in small installments at reasonable interest rates. By May 2019, nearly 6 crore women in India have become members in 54 lakh women SHGs. About ₹10-15,000 per SHG and another ₹2.5

lakhs per SHG as a Community Investment Support Fund (CISF) are provided as part of renovating fund to take up self-employment for income generation. Such credit provisions are generally referred to as micro-credit programs. SHGs have helped in the empowerment of women. It is alleged that the borrowings are mainly confined to consumption purposes. Why are borrowers not spending for productive purposes?

Rural Banking — a Critical Appraisal: Rapid expansion of the banking system had a positive effect on rural farm and non-farm output, income, and employment, especially after the Green Revolution — it helped farmers to avail services and credit facilities and a variety of

loans for meeting their production needs. Famines became events of the past; we have now achieved food security which is reflected in the abundant buffer stocks of grains However, all is not well with our banking system.

With the possible exception of commercial banks, other formal institutions have failed to develop a culture of deposit mobilization — lending to worthwhile borrowers and effective loan recovery. Agriculture loan default rates have been chronically high. Why do farmers fail to pay back loans? It is alleged that farmers are deliberately refusing to pay back loans. What could be the reasons?

Thus, the expansion and promotion of the rural banking sector have taken a backseat after reforms. To improve the situation, In recent years, all adults have been encouraged to open bank accounts as a part of a scheme known as Jan-Dhan Yojana. Those bank account holders can

get Rs. 1-2 lakh accidental insurance coverage and overdraft facilities for Rs. 10,000 and get their wages if they get any government-related jobs and work under MNREGA; old age pension and other social security payments of the government are transferred

Agriculture Market system

Agricultural marketing is a process that involves the assembling, storage, processing, transportation, packaging, grading, and distribution of different agricultural commodities across the country. Prior to independence, farmers, while selling their produce to traders, suffered from faulty weighing and manipulation of accounts.

Farmers who did not have the required information on prices prevailing in markets were often forced to sell at low prices. They also did not have proper storage facilities to keep back their produce for selling later at a better price. Do you know that even today, more than 10 percent of goods produced on farms are wasted due to lack of storage? Therefore, government intervention became necessary to regulate the activities of private traders.

Rural Development class 11
Rural Development class 11

Let us discuss four such measures that were initiated to improve the marketing aspect. The first step was the regulation of markets to create orderly and transparent marketing conditions. By and large, this policy benefited farmers as well as consumers.

However, there is still a need to develop about 27,000 rural periodic markets as regulated marketplaces to realize the full potential of rural markets. The second component is the provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storage, and processing units.

The current infrastructure facilities are quite inadequate to meet the growing demand and need to be improved. Cooperative

marketing, in realizing fair prices for farmers’ products, is the third aspect of government initiative. The success of milk cooperatives in transforming the social and economic landscape of Gujarat and some other parts of the country is testimony to the role of

cooperatives. However, cooperatives have received a setback during the recent past due to inadequate coverage of farmer members, lack of appropriate link between marketing and processing cooperatives, and inefficient financial management. The fourth element is the policy instruments like (i) assurance of minimum support prices (MSP) for agricultural

products (ii) maintenance of buffer stocks of wheat and rice by Food Corporation of India and (iii) distribution of food grains and sugar through PDS. These instruments are aimed at protecting the income of the farmers and providing food grains at a subsidized rate to the poor. However, despite government intervention, private trade (by moneylenders, rural

political elites, big merchants, and rich farmers) predominates agricultural markets. The need for government intervention is imminent particularly when a large share of agricultural products is handled by the private sector.

Agricultural marketing has come a long way with the intervention of the government in various forms. Some scholars argue that the commercialization of agriculture offers tremendous scope for farmers to earn higher incomes provided the government intervention is restricted. What do you think about this view?

Emerging Alternate Marketing Channels: It has been realized that if farmers directly sell their produce to consumers, it increases their incomes. Some examples of these channels are Apni Mandi (Punjab, Haryana, and Rajasthan); Hadapsar Mandi (Pune); Rythu Bazars (vegetable

and fruit markets in Andhra Pradesh and Telangana) and Uzhavar Sandies (farmers markets in Tamil Nadu). Further, several national and multinational fast-food chains are increasingly entering into contracts/alliances with farmers to encourage

Diversification into Productive Activities

Diversification includes two aspects – one relates to a change in the cropping pattern and the other relates to a shift of workforce from agriculture to other allied activities (livestock, poultry, fisheries, etc.) and non-agriculture sector. The need for diversification arises from the fact that there is a greater risk in depending exclusively on farming for livelihood.

Diversification towards new areas is necessary not only to reduce the risk from the agriculture sector but also to provide productive sustainable livelihood options to rural people. Much of the agricultural employment activities are concentrated in the Kharif season. But during the Rabi season, in areas where there are inadequate irrigation facilities, it

Rural Development class 11
Rural Development class 11

becomes difficult to find gainful employment. Therefore expansion into other sectors is essential to provide supplementary gainful employment and in realizing higher levels of income for rural people to overcome poverty and other tribulations. Hence, there is a need to

focus on allied activities, non-farm employment, and other emerging alternatives of livelihood, though there are many other options available for providing sustainable livelihoods in rural areas.

As agriculture is already overcrowded, a major proportion of the increasing labor force needs to find alternate employment opportunities in other non-farm sectors. Non-farm economy has several segments in it; some possess dynamic linkages that permit healthy growth while

others are in subsistence, low productivity propositions. The dynamic sub-sectors include agro-processing industries, food processing industries, leather industry, tourism, etc. Those sectors which have the potential but seriously lack infrastructure and other support include traditional home-based industries like pottery, crafts, handlooms, etc.

The majority of rural women find employment in agriculture while men generally look for non-farm employment. In recent times, women have also begun looking for non-farm jobs.

Rural Development

Animal Husbandry: In India, the farming community uses the mixed crop-livestock farming system —cattle, goats, and fowl are the widely held species. Livestock production provides increased stability in income, food security, transport, fuel, and nutrition for the family

without disrupting other food-producing activities. Today, the livestock sector alone provides alternate livelihood options to over 70 million small and marginal farmers including landless laborers. A significant number of women also find employment in the livestock sector. Chart 5.1 shows the distribution of livestock in India. Poultry accounts for the largest share with 61 percent

Rural Development class 11 Question and Answer

Question:1 What is rural development class 11 notes?


  1. Introduction to Rural Development: Understanding the concept, importance, and scope of rural development.
  2. Characteristics of Rural Areas: Discuss the unique features of rural areas such as an agriculture-based economy, sparse population density, etc.
  3. Rural Development Policies: Exploring government policies and programs aimed at promoting rural development, including land reforms, agricultural subsidies, rural infrastructure development, etc.
  4. Rural Development Strategies: Analyzing various approaches to rural development, such as top-down vs. bottom-up approaches, integrated rural development, sustainable development, etc.
  5. Role of Agriculture in Rural Development: Examining the significance of agriculture in the economic and social development of rural areas, including modernization of agriculture, agricultural extension services, etc.
  6. Rural Livelihoods: Understanding the different sources of livelihood in rural areas, including agriculture, animal husbandry, cottage industries, etc.
  7. Rural Poverty Alleviation: Discuss strategies to reduce poverty in rural areas, including employment generation schemes, microfinance, social safety nets, etc.

Question:2 What is the concept of rural development?

Answer: Village development implies empowering villages in their facilities and resources for all development to be effective. With this, action is taken to increase village resources and strengthen people-power.

Read also

  1. Human Capital Formation In India
  2. liberalisation privatisation and globalisation

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