INDIAN ECONOMIC DEVELOPMENT

CLASS -12TH
Ch-5 ( Rural Development )

1. Meaning of Rural Development:

a) Rural Development refers to continuous and comprehensive socio-economic process,
attempting to improve all aspects of rural life.
b) In India , Agriculture is the major source of livelihood in Rural Sector in which more than
2/3rd of India’s population engaged on it.
c) The term rural development includes not only agricultural development but it involves
all those aspects which improve the quality of life of people.

2. Process of Rural Development:

I.Development Of Human Resources:
 Proper attention to literacy(especially for female),skill and education.
 Better and more affordable health facilities for the physical growth and
sanitation facilities.
II.Development of Infrastructure:
 Improvement in electricity , irrigation , credit, marketing, and transport
facilities.
 Better facilities for Agricultural Research.
III.Land Reforms:
 Elimination of exploitation in land relations.
 Establish the goal of “Land to the tiller”.

IV.Alleviation Of Poverty:
 About 22% of total population is still below the poverty line. So there is
serious need for taking various steps for alleviation of poverty and
improvement in weaker sections of the society.
V.Development Of Productive Resources:
 To enhance opportunities of employment (other than farming).

3. Rural Credit:
 In Agriculture, Farmers are in strong need of credit due to long time gap between crop
sowing and realisation of income.
  Credit is one of the important factors which contribute to Agricultural Production.

4.Non-Institutional Sources Of Credit:

 Moneylenders: They exploit the peasants by charging the high rate of
interest and manipulate their accounts without their knowledge.

 Relatives – Cultivators borrow loans from their relatives at the time of crisis
and no interest was charged on it and normally returned after harvest.

 Traders and Commission Agents- They give loans to poor peasants by

mortgage their lands but on a condition is that the crops will be sold to them
at low prices.

 Rich Landlords- They also charge the high rate of interest and exploit the
poor peasants and tenants.

5.What is the need to establish Institutional Sources Of Credit:

 To provide adequate credit to farmers at a cheaper rate.

 To assist small and marginal farmers for raising their agricultural production and
maximizing their income.

6. Institutional Sources Of Credit:

I. Co-operative Credit – To liberate (freedom) the Indian peasants from the clutches
(holds tightly )of moneylenders and provide credit to them at low interest rate.

II. Land Development Banks- They give loans to poor peasants against mortgage
their lands. Loans are given for permanent improvement of lands ,
purchasing agricultural implements.

III. Commercial Bank Credit – After nationalization in 1969 , they expanded their
branches in rural areas and started directly financing the farmers.

IV. Regional Rural Banks – They are opened in those areas where there were no banking
facilities and provide credit to poor peasant, artisans and small entrepreneurs in rural
areas.

V. The Government- The loans provided by the Govt. are known as Taccavi Loans a the
time of emergency like flood,famines,etc. They charge the interest as low as 6%.
VI. National Bank for Agricultural and Rural Development (NABARD) :
a) It is an apex body which coordinates the working for the expansion of rural
credit.
b) Its main objective is to promote health and strength of credit financial
institutions.
c) It also provide finance to non-farm sectors for integrated rural development
and prosperity of backward areas.

VII. Self- Help Groups(SHGs) Bank linkages Programme for macro finances-
a) It involves small farmers, poor peasants, artisans ,etc in which they pool/
collect their small savings by a minimum contribution from each member.
b) From the pooled money ,Credit is given to the needy members at a cheaper
interest and to be repaid in small installments.

7. Critical Appraisal Of Rural Banking:

I. Insufficiency: The volume of rural credit is insufficient to meet its demand.
II. Inadequate coverage of Institutional Sources:These sources are unable to cover the
entire rural areas.
III. Less attention to poor or marginal farmers: Because of absence of collateral security
poor /marginal farmers were failed to avail loan .
IV. Growing Overdues: These institutional Sources are cautious to granting loan because
of their poor repaying capacity.

8.Agriculrural Markerting:
It is a process that involves assembling, storage,processing,transportation,packaging,grading
and distribution of different agricultural commodities across the country.
Problems Faced by Farmers:
I. Lack of Market Information- Farmers were often forced to sell their produce at lower
prices other than the prices prevailing in the market due to lack of market information
about prices.

II. Lack Of Storage Facilities-They do not have a storage facilities to keep their produce for
selling later at a better price and more than 10% of their goods produce in farms was
wasted due to lack of storage.

III. Manipulation By Big Traders-Farmers were suffer to faulty weighing and manipulation
of their accounts.
9.Measures To Improve Agricultural Marketing :
I. Regulated Markets -To protect farmers from malpractices of sellers and brokers. This
policy benefited farmers as well as consumers.

II. Infrastructural Facilities -To provide facilities like storage , warehouses , godown, cold
storages , etc.

III. Co-operative Marketing – It is a system in which famers pools their marketable surplus
of crops and distributes the sale on the basis of each individual share.

 It improves the bargaining facility of famers as they sell there produces

through one agency.
 Co-operative Marketing Societies have storage facilities so they sell they
produce later at better prices.
 In provides the facility of bulk transportation which makes their cost cheaper.

IV.Differential Policy Instruments-

 Minimum Support Prices: To safeguard the interest of Farmers , Government
fixes the minimum price of agricultural products like wheat,maize,etc.
 Maintenance Of Buffer Stock: The Food Corporation Of India (FCI) purchases
agricultural produce at a large volume in the year of surplus production and used
at the time of food shortage .It helps to ensure regularity in supply and stability in
prices.
 Public Distribution System(PDS) : It operates through a network of ration shops
and provides the agricultural produce at a the price lower than the market to the
weaker sections of the society.

10. Emerging Alternate Marketing Channels:

I.Origin Of Farmers Markets: Farmers can increase their income if they sell directly their
produce to consumers by eliminating middlemen.
Some examples are:
 Apni Mandi in Punjab,Haryana,Rajasthan
 Hadaspar Mandi in Pune
 Rythu Bazaars in Andhra Pradesh,Telangana
 Uzhavavar Sandies ( Tamil Nadu )
II. Alliance with National and Multinational Companies:
 They encourage the farmers to cultivate farm products of desired quality.
  They make arrangements which help the farmers to reduce their price risk of farmers
and expand the market for farm products

11.Diversification Of Agricultural Activities:

a) To enable rural people to overcome poverty and other troubles.
b) To enable them to earn higher levels of income.
c) To provide supplementary gainful employment.

11.Non-Farm Areas Of Employment:

I.Animal Husbandry(Livestock Farming)-
a) It is the Branch of Agriculture which is concerned with breeding ,rearing and
caring of farm animals.
b) India owns one of the largest livestock populations in the world.
c) Under this farming cattle , goats and fowls are the widely held species.
d) It is defined as domesticated animals raised to produce labour and commodities such as
cattle , goats ,etc.
e) A significant number of women also find employment in the livestock sector.
II.Dairying-
a) It is the branch of agriculture which involves breeding,raising and utilisation of Dairy
animals for the production of milk and the various dairy products processed from it.
b) Operational Flood ( or white revolution ) was started by National Dairy Development
Board in 1970 under the expert guidance of then chairman ,Dr.Verghese Kurien.
c) Under this revolution,all the farmers pool their milk produce according to different
grades and same is processed and marketed to urban centres through cooperatives.

III.Fisheries-
a) It refers to the occupation devoted to the catching,processing or selling of fish and
other aquatic animals.
b) Important points about Fishing-
 Fishing Community regards water body as a mother: It provides a life-giving
source to fishing community.
 Share of Fishing in GDP:The total fish production was 0.9% Of GDP In
India,West Bengal,Andhra Pradesh,Kerala,Gujarat,Maharshtra and Tamil Nadu
are major fish Producing states.
 c.)Problems faced in Fishing:
 Widespread Unemployment
 Low per capita earnings
 High Illiteracy rate

IV. Horticulture -
a) Horticulture refers to the science or art of cultivating
fruits,vegetables ,tuber,flowers,medicinal and aromatic plants.
b) It contributes 6% of GDP in India.

V.Information Technology-
a) Information Technology refers to the branch of Engineering that deals with the
use of computers and telecommunication to retrieve and store and transmit
information.
b) It plays a crucial role in achieving sustainable development in 21 st century.

12. Organic Farming:

 Organic farming can be defined as an agricultural process
that uses biological fertilisers and pest control acquired from
animal or plant waste.

13. Benefits Of Organic Farming:

a) Generate income through exports : As there is increasing demand for organically
grown crops is on rise.
b) Provides Healthy Food : It has more nutritional value other than chemical farming.
c) Safety of Environment : It is pesticide farming and is produced an environment is an
sustainable way.
d) Source Of Employment : In this farming, more labours are required other than
conventional farming .It benefitted India because abundance Of labour.
e) Sustains Soil Fertility : In this farming animal manures are used as inputs for improving
the soil fertility whereas use of chemicals and pesticides which erode the soil fertility.
14. Challenges Before organic Farming:
a) Less Popular : This farming needs to be popularized by creating awareness and
willingness on the part of farmers.
b) Shorter Food Life : Because in this farming sparyed does not required.
c) Limited Choice Of crops : The choice in production of off-season crops is quite limited in
this farming.