Rural sector in India

Presented by: Dimple Dhiresh Eeshita

Rural sector in India

A vast majority of people in the world live in rural areas.

Even for rich countries, rural area played a crucial role in

early stages of development In Asian context, development primarily means rural development India is primarily a rural country, 70% of pop. In villages Indian culture developed and flourished primarily in rural communities

 In rural areas, for several years people lived a life below

the poverty line

Main reasons for poverty in rural India

Rapid population growth
Lack of alternate employment opportunities other than agriculture Illiteracy
BOYS 20% primary level, 57% middle level, 71% secondary level are out of school

GIRLS 55% primary level, 75% middle level, 85% secondary level are out of school

Government aims to eliminating poverty in rural India

Full utilization of available physical and

human resources in rural areas, with functional linkage Development of agriculture and allied activities Development of rural industries Effective participation of rural poor Income generating schemes with Minimum Needs Programme(education, rural health, water supply, nutrition etc.) Increasing capacity of rural sector

Rural Development: Definition

A World Bank publication defines RD as improving

the living standards of the masses of the low-income population residing in rural areas making the process of rural development self-sustaining. Includes activities like
Agriculture forestry

fishery
rural crafts and industries and the building of social and economic infrastructure

COMPONENTS OF RURAL DEVELOPMENT PROGRAMME Women

Empowerment
Self Help Groups. Adult Literacy

Employment oriented programme

Community Participation

Health Education Camps

Environment
Watershed Mgnt. Awareness on Solar Energy

Education

Rural Development Programme

Youth Programme

Agriculture

Rural Governance
Panchayat Training

Vocational Training
Stitching & Computer Classes

Research Training and Documentation

Agriculture
At present, Agriculture Sector, provides

the livelihood to 65 to 70% of the total population. This sector provides employment to 52% of countrys workforce and is the single largest private sector occupation.

Cont..

Agricultural production has largely been stagnating for the past decade. Costs of inputs like fertilizers and power have gone up more than the produce. Per capita foodgrain availability has shrunk to what it was three decades ago. More than 67 % of cultivated area is held in holdings less than 4 hectares in size, compared to just 35 % in 1953. Primary reason for this- decline in public investment in agriculture.

AGRICULTURE 72% of farmers have 1 hectare or less. Contribution to GDP has drastically dropped from over 53% in 1950 to 21 % in 2008. For the country to achieve 9-10 % growth, agriculture has to grow at least by 4 %. While it grew by 2.5 % in the first quarter of 200910 and by less than 1.5% in the second. Adverse impact of the deficient monsoon. It is likely to be negative in the 3rd quarter of this fiscal. source: ministry of Finance website

DEVELOPMENT OF AGRICULTURE Sector

Progress of special programmes for raising agricultural production National food security mission. Rashtriya krishi Vikas Yojana The National Agricultural Insurance Scheme (NAIS) Krishi Sramik Samajik Suraksha Yojana Weather- Based crop Insurance Scheme(WBCIS)

source: Economic Survey,2008-09

Cont
In 2009, Department of Agriculture and Cooperation, as custodian of the end-users i.e. the farming community, has sponsored a project entitled: Development and Application of Extended Range Forecasting System for Climate Risk Management in Agriculture (ERFS). In the first phase (two-three years), it is envisaged to develop a seasonal forecast system for met subdivisions/ agro-climatic zones. In the second phase, monthly forecast is targeted at these levels.

Steps taken by govt. For Agriculture and Allied Activities

Several measures were taken during the year to increase

the flow of credit to agriculture and allied activities. The Union Budget for 2009-10 set a target of Rs.3,25,000 crore for agricultural credit for the year. Agricultural Debt Waiver and Debt Relief Scheme, 2008

BUDGET 2010-2011
Agricultural growth

Govt will follow a 4 pronged strategy covering: A) Agriculture production: Rs 400 cr provided to extend the green revolution to eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP ,West Bengal and Orissa. Rs 200 cr provided for sustaining the gains already made in green revolution areas through conservative farming which involves concurrent attention to soil health , water conservation and preservation of biodiversity. Rs 300 crore provided to organise 60000 pulses and oil seed villages in rain fed areas during 2010-11.

B) Reduction in wastage of produce Government to address the issue of opening up retail trade . It will help in bringing down the considerable difference between farm gate, wholesale and retail prices. Deficit in storage capacity met through an ongoing scheme for private sector participation-FCI to hire godowns from private parties for a guaranteed period of 7 yrs. C) Credit support to farmers Banks have been consistently meeting the targets set for agriculture credit flow. For the year 2010-2011 the target has been set at Rs 375000 crore. In view of recent drought in some states and floods in some other parts of the country the period for repayment of the loan amount by farmers extended by 6 months from dec 31,2009 to june 30,2010 under the Debt Waiver and Debt Relief Scheme for Farmers. Incentive of additional 1% interest subvention to farmers who repay short term crop loan as per schedule increases to 2% for 2010-2011.

d) Impetus to food processing sector In addition to 10 mega food park projects already being set up the govt has decided to set up 5 more such parks. External commercial borrowings to be available for cold storage or cold room facility including farm level pre cooling for preservation or storage of allied, agricultural produce marine products and meat. SOCIAL WELFARE Mahila kisan sashaktikaran pariyojana to meet the specific needs of women farmers to be launched with a provision of Rs 100 crore as a sub component of National Rural Livelihood Mission. Saakshar bharat to further improve literacy rate launched with a target of 7 crore non literate adults which includes 6 crore women. Launched in sept 2009.

Other allocations
The budget 2010-11provides a total of Rs. 66100 crore Rupees

for Rural Development. Allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme has been stepped up to Rs. 40,100 crore from 39,100 crore in 2010-11. Unit cost under Indira Awas Yojna has been increased to Rs. 45000 in plain areas and Rs. 48500 in the hilly areas. Allocation for Indira Awas Yojna has been increased from Rs. 8800 crore in Budget 2009-10 to Rs. 10,000 crore in 2010-11. Allocation to Backward Region Grant Fund has been enhanced by 26% from 5800 crore in 2009-10 to 7300 crore in 2010-11. Additional central assistance of Rs. 1200 Crore has been provided for drought mitigation in the Bundelkhand region.

SCHEMES
Addressing the challenge of unemployment in the rural areas of the country is central to the development of rural sector for ameliorating the economic condition of the people.

National Rural Employment Guarantee Act (NREGA) and Sampoorna Grameen Rozgar Yojana (SGRY) for wage employment.
Swarnajayanti Gram SwarozgarYojana (SGSY).(self-employment) Besides generating employment these wage employment schemes also ensure creation of durable assets in rural areas. Initiatives are also taken by the Ministry to build and upgrade the basic rural infrastructure through various schemes. Pradhan Mantri Gram Sadak Yojana (PMGSY) construction and repairing of rural roads are taken up to ensure rural connectivity leading to an increase in rural employment opportunities, better access to regulated and fair market, better access to health, education and other public services so as to accelerate the pace of economic growth in rural areas.

Similarly basic amenities for housing, drinking water and toilets, etc. are provided under Indira Awaas Yojana (IAY), Accelerated Rural Water Supply Programme (ARWSP) and Total Sanitation Campaign (TSC) to enhance the welfare and well-being of the vulnerable sections of rural population. Area Development is encouraged through Watershed Programmes to check the diminishing productivity of waste land and loss of natural resources.

NREGA
National Rural Employment Guarantee Act (NREGA) is the flagship

programme of the Government that directly touches lives of the poor and promotes inclusive growth. The Act aims at enhancing livelihood security of households in rural areas of the country by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work. The primary objective of the Act is augmenting wage employment. Its auxiliary objective is strengthening natural resource management through works that address causes of chronic poverty like drought, deforestation and soil erosion and so encourage sustainable development.

 Over the last two years, implementation trends vindicate the basic

objective of the Act. Increasing Employment Opportunities: In 2008-2009, 253 crore households have been provided employment and 85.29 crore person days have been generated. Enhancing Wage Earning and Impact on Minimum Wage Strengthening Natural Resource Base of Rural India: In 20082009,16.88 lakh works have been undertaken, of which 49% are related to water conservation. Financial Inclusion of the poor: The Central government has been encouraging the state governments to make wage payment through bank and post office accounts of wage seekers. Thus far, 2.9 crore NREGA bank and post office accounts have been opened to disburse wages. The Ministry is also encouraging the NREGA workers to obtain insurance under Jan Shri Bima Yojana.

The following Graphic Shows the Increased Outlays for NREGA for last 4 years:

Rural Sector is one of the pillars to the overall economic development of India through its agricultural and non agricultural sub sectors.
This sector has suffered adversely because of mis- directed policies of the govt. , excessive number of small uneconomic land holdings, excessive dependence on monsoons massive unemployment and illiteracy has rendered this sector as uncompetitive.

For the year 2010-11, Rs.66,100 crore for Rural Development has been proposed by the Indian Govt.

The National Food for Work Programme was launched in November 2004 in 150 most backward districts of the country, identified by the Planning Commission in consultation with the Ministry of Rural Development and the State governments. The objective of the programme was to provide additional resources apart from the resources available under the Sampoorna Grameen Rozgar Yojana (SGRY) to 150 most backward districts of the country. The scheme was 100 per cent Centrally sponsored.

The programme has since been subsumed in National Rural Employment Guarantee Act which has come in force in 200 identified districts of the country including 150 NATIONAL FOOD FOR WORK PROGRAMME (NFFWP) districts. The Act provides 100 days of work guarantee to every rural household whose members volunteer to do unskilled manual work.

Launched on 25 December 2000 as a fully funded Centrally Sponsored Scheme. The primary objective of the PMGSY is to provide connectivity to all the eligible unconnected habitations of more than 500 persons in the rural areas (250 persons in the hilly and desert areas) by good quality allweather roads. Under Bharat Nirman, goal has been set to provide connectivity to all the habitations with population of more than 1000 in the plain areas and habitations with a population of 500 or more in hilly and tribal areas.

Rural Housing is also a one of the six component of Bharat Nirman. Under Bharat Nirman, 60 lakh houses are to be constructed under the Scheme of Indira Awaas Yojana in four years w.e.f 2005-06 to 2008-09. 50.38 lakh houses have been constructed during first three years of the Bharat Nirman Programme period with an expenditure of Rs. 13365.52 crore.

Bharat Nirman has made a substantial contribution to the upgradation of rural infrastructure through its various programmes.

For the year 2010-11, Govt of India will allocate an amount of Rs.48,000 crore for these programmes.

The Swarnjayanti Gram Swarozgar Yojana (SGSY) was launched as an integrated programme for self-employment of the rural poor with effect from 1 April 1999. The objective of the scheme is to bring the assisted poor families above the poverty line by organising them into Self Help Groups (SHGs) through the process of social mobilisation, their training and capacity building and provision of income generating assets through a mix of bank credit and government subsidy.

The focus of the programme is on establishing a large number of microenterprises in rural areas based on the ability of the poor and potential of each area, both land-based and otherwise, for sustainable income generation.

Article 41 of the Constitution of India directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement.In accordance with the Directive Principles of State Policy, the Government of India introduced in 1995 the National Social Assistance Programme (NSAP) to lay foundation to a National Policy for Social Assistance for the poor. The NSAP aims at ensuring minimum national standard for social assistance in addition to the benefits that state are currently providing or might provide in future. At present NSAP comprises Indira Gandhi National Old Age Pension Scheme (IGNOAPS), National Family Benefit Scheme (NFBS) and Annapurna.

Under IGNOAPS which was launched on 19th November, 2007, Rs. 200 per month per beneficiary is provided by way of central assistance to all persons who are 65 years of higher and belonging to a family living below the poverty line. Earlier under National Old Age Pension Scheme (NOAPS), the pension was restricted to destitutes only. The number of beneficiaries under IGNOAPS is estimated to reach 160 lakh persons as compared to 87 lakh under NOAPS.

A Centrally-sponsored scheme, District Rural Development Agency (DRDA) administration was launched on 1 April 1999 with the objective of strengthening the DRDAs and making them more professional in their functioning. The funding pattern of the DRDA administration is in the ratio of 75:25 between the Centre and the States.During 2007-2008 the revised estimate for DRDA administration was Rs. 250 crore and the whole amount was also released. In 2008-09 a budget provision of Rs. 250 crore had been made for the scheme.