Rural Development: Issues, Challenges & Policy Responses | UGC NET Economics – Notes

Rural Development: Concept and Significance

• In broad terms, India’s (economic) development is inextricably linked to that of India’s rural (economic) development. A large majority of Indians live in relatively small localities and are engaged in farming or some activity related to farming. In 2001, the average Indian lived in a village of about 4,200 people; 72 percent of India’s total population was classified as rural, and 58 percent of workers were engaged in agriculture. Just 11 percent of Indians lived in large cities of 1 million or more residents (Haub and Sharma).

• The core problems of India such as wide-spread poverty, growing inequalities, rapid population growth, growing and rising unemployment, among others, find their origins in the stagnation and often retrogression of economic life and development in rural areas.

• Most social and economic indicators consistently show that rural areas compare unfavourably with urban areas. It is at the rural level that the problems of hunger, ignorance, ill-health and high mortality are most acute.

• Therefore, if development is to take place and become self-sustaining, it will have to be rooted and concentrated in the rural areas.

Understanding the term ‘Rural Area’

• There are two main characteristics of rural areas. First, rural people usually live in a farmstead or in groups of houses containing perhaps 5000-10,000 persons, separated by farmland, pasture, trees or scrubland. Second, the rural people spend most of their working time on farms. Rural areas are sparsely settled places away from the influence of large cities and towns. Such areas are distinct from more intensively settled urban and suburban areas, and also from unsettled lands such as outback or wilderness.

• Unfortunately there does not exist a single methodology, much less a single definition of what constitutes rural. The problem is that, patterns of spatial occupation are, inter alia, culturally and historically determined and vary among regions of the world. A natural definition of ‘rural’ is to define it by exclusion, as that which is not urban, where urban is defined on the basis of population agglomerations.

• In practice, there are two main methodologies to define ‘rural’:

  • The first methodology is to use a geopolitical definition. In this, urban is defined first, by law as all of the state, region, and district capitals (centers), and by exclusion all the rest is defined as rural. Countries like Colombia, El Salvador, Dominican Republic, and Paraguay follow this methodology. In all of these countries urban population is defined as that living within the “cabecera municipal” the municipality’s head or center. The drawbacks of this methodology are obvious: populations that live outside the geopolitical limit of a city (specially in a growing city) are miscounted as rural; while population living in tiny municipalities in sparsely-populated regions is miscounted as urban.

  • The other popular methodology is to use observed population agglomeration to define ‘urban’. In this case, populations that live within an area where contiguous households form populations larger than, say 2,000 inhabitants are considered urban, while by exclusion the rest is defined as rural. This methodology seems more attractive because it establishes a clear threshold; unfortunately this threshold varies widely around the world. (Anríquez and Stamoulis, 2007).

• Many Indians who live in relatively less populated areas are classified as rural because their communities are highly dependent on agriculture and lack the population density required for the official urban designation. In general, India classifies communities as urban if they have at least 5,000 people; a population density of at least 400 people per square kilometer (1,000 per square mile); and less than 25 percent of the male labor force engaged in agriculture. Accordingly, many of the 16 percent of Indians living in places with 5,000 to 19,999 people are classified as rural (Haub and Sharma 2006).

• The rural-urban borderline in a country is seldom changed. It is more reliable to compare rural and urban shares of the population and of the poor, and disparities among them (mean income, dollar-poverty incidence, doctor-patient ratios, illiteracy, etc) in the same country over time than to compare countries.

Why and What of Rural Development in India?

Why Rural Development?

• India is primarily an agriculture-based country. Agriculture contributes nearly one-fifth of the gross domestic product in India. With about 70% of India’s population, i.e. approximately 700 million people, ‘Rural India’ can well be termed as the ‘Real India’. To make India’s growth story a truly inclusive one, it becomes imperative that the development challenges facing rural India are overcome with utmost priority.

• Main feature of population living in rural areas are:

  • Pre-dominance of agriculture – agriculture main occupation.

  • Old methods of agriculture.

  • Low standard of living.

  • Low per capita income.

  • Vicious circle of poverty.

  • Market imperfection, etc.

• “Growth with social justice” has been the basic objective of the development planning in India since independence. Social justice is a concept relating to the perceived fairness or justice of a society in its divisions of rewards and burdens. The concept is distinct from those of justice in law, which may or may not be considered moral in practice. Opposition to social injustice is increasingly a platform of emerging political parties. Social injustice arises when equals are treated unequally and unequals are treated as equals.

• At the beginning of the First Five-Year Plan, almost half of the Indian population was living below the poverty line, 80% of which lived in the rural areas. The incidence of poverty in villages was widespread. In general, poverty can be defined as a situation when people are unable to satisfy the basic needs of life. The definition and methods of measuring poverty differ from country to country. According to the definition by Planning Commission of India, poverty line is drawn with an intake of 2400 calories in rural areas and 2100 calories in urban areas. If a person is unable to get that much minimum level of calories, then he/she is considered as being below poverty line.

• This problem was further aggravated by disparities that existed among the States, between men and women and among different social groups. The magnitude of poverty and disparities that existed between various social groups necessitated planned State-intervention to provide succor and relief to millions reeling under poverty, particularly the disadvantaged and marginalised social groups such as the Scheduled Castes, Scheduled Tribes, other backward castes, women, children, the physically handicapped and the disabled.

• At the beginning of the new millennium, 260 million people in the country did not have incomes to access a consumption-basket which defines the poverty line. Of these, 75 per cent were in the rural areas. India is a home to 22 per cent of the world’s poor. Such a high incidence of poverty is a matter of concern in view of the fact that poverty eradication has been one of the major objectives of the development planning process. Indeed, poverty is a global issue. Its eradication is considered integral to humanity’s quest for sustainable development. Reduction of poverty in India is, therefore, vital for the attainment of international goals.

• People in rural areas should have the same quality of life as is enjoyed by people living in sub-urban and urban areas. Further, there are cascading effects of poverty, unemployment, poor and inadequate infrastructure in rural areas as well as of urban centres causing slums and consequential social and economic tensions manifesting in economic deprivation and urban poverty. Hence, ‘rural development’ is concerned with economic growth and social justice; improvement in the living standard of the rural people by providing adequate and quality social services and minimum basic needs becomes essential.