NCERT Class 11 Economics Chapter 6: Rural Development YouTube Lecture Handouts

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NCERT Class 11 Economics Chapter 6: Rural Development
  • Majority of poor live in rural areas
  • Rural area – Agriculture is main livelihood (2 ⁄ 3rd population depends on it)
  • Development of villages is development of nation – MK Gandhi

Rural Development

  • Development of area lagging behind in overall development of village economy
    • Literacy, education and skill development
    • Health and public health
    • Land reforms
    • Productive resources of locality
    • Infrastructure development
    • Alleviate poverty – uplift weaker sections of society
    • Engage people in farm and non-farm activities
  • Share of agriculture to GDP was on decline but population related to this sector didn՚t show any change
  • Inadequate infrastructure, lack of alternate employment opportunities in industry or service sector, increasing casualization of employment etc. impede rural development


  • Growth of economy is governed by infusion of capital & higher productivity
  • As gestation time between sowing and real income is high – farmers borrow for initial investment on seeds, fertilizers, implements and religious ceremonies
  • At independence, money lenders and traders exploited small and marginal farmers and landless labourers by high interest rate and debt trap
  • After 1969, social banking & multiagency approach for rural credit – NABARD (National Bank for Agriculture and Rural Development) was set in 1982 to coordinate rural financing system
  • Green revolution – led to diversification of credit towards production oriented lending
  • Now, RRB (Regional Rural Banks) , cooperatives and land development banks – dispense credit at cheap rate
  • SHGs – fill the gap in formal credit system because formal credit delivery mechanism has not only proven inadequate – for loans collateral is required and SHG promotes thrift in small proportions by minimum contribution from each member – credit is given from the pooled money (repayable in small installments at reasonable interest rate) – micro credit programs
  • β€˜Kudumbashree’ : Women-oriented community-based poverty reduction program implemented in Kerala. In 1995, a thrift and credit society was started as a small savings bank for poor women with the objective to encourage savings.
  • Thrift and credit society mobilized β‚Ή 1 crore as thrift savings. These societies have been acclaimed as the largest informal banks in Asia in terms of participation and savings mobilized.

Rural Banking

  • Positive impact on output, income, employment to avail services and credit
  • Food security as buffer stocks
  • Except commercial banks, other formal institutions failed to develop deposit mobilization (lending to worthwhile borrowers and effective loan recovery)
  • Agriculture loan default rate is high

Agricultural Market System

  • Involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities
  • Farmers who did not had idea of the existing price were forced to sell at lower price
  • Lot of goods were wasted due to storage issues (so intervention of private traders became must)

Methods to Improve Marketing

  • Regulating market to create orderly transparent marketing conditions (develop 27,000 rural periodic markets as regulated markets)
  • Provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storages and processing units
  • Cooperative marketing for fair prices – received setback due to inadequate coverage of farmer members, lack of appropriate link between marketing and processing cooperatives and inefficient financial management
  • Assurance for Minimum Support Price (MSP)
  • Maintain buffer stock by FCI
  • Distribution of foodgrains and sugar by PDS

Alternate Marketing Channels

  • Apni Mandi (Punjab, Haryana and Rajasthan)
  • Hadaspar Mandi (Pune)
  • Rythu Bazars (vegetable and fruit markets in Andhra Pradesh and Telangana)
  • Uzhavar Sandies (farmers markets in Tamil Nadu)

Fast food chains are entering in contract with farmers to cultivate farm products of desired quality – provide them seeds, inputs and procurement at pre-decided prices

  • It reduces price risk of farmers
  • Expands market for farm products
  • Raise income of small farmers

Diversification into Productive Activities

  • Change in cropping pattern
  • Shift of workforce from agriculture to allied activities
  • Provide sustainable livelihood options to rural people (gainful employment in rabi season when irrigation is inadequate)
  • Non-farm activities – agro-processing industries, food processing, leather, tourism
  • Meat, egg, wool
  • Women in agriculture and men in non-farm activities

Animal Husbandry: mixed crop livestock farming system – provides stable income, food security, transport, fuel and nutrition requirements

  • Livestock provides option to 70 million small and landless laborers (poultry accounts for 58 %)
  • 2012 – India has 300 million cattle, 108 million buffaloes
  • Milk production increased 8 times from 1951 to 2014 by operation flood
  • Improved technology & promotion of good breeds of animals to enhance productivity
  • Improved veterinary care & credit facilities

Fisheries – fishing community considers water as mother or provider. Inland fish production contribute to 64 % value and 36 % to marine sector.

  • Total fish production account to 0.8 % of total GDP (major states - West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu)
  • 60 % workforce in export marketing & 40 % in internal marketing are women in fishery

Horticulture – fruits, vegetables, tubers, flowers, spices

  • 1 ⁄ 3rd of value of agricultural output & 6 % of GDP
  • India is leader in mangoes, bananas, coconuts, cashew nuts and a number of spices and is the second largest producer of fruits and vegetables
  • Employment options – Flower harvesting, nursery maintenance, hybrid seed production and tissue culture, propagation of fruits and flowers and food processing

IT revolution – sustainable development and food security

Tamil Nadu Women in Agriculture (TANWA) : Project initiated in Tamil Nadu to train women in latest agricultural techniques. It induces women to actively participate in raising agricultural productivity and family income - in Thiruchirapalli run by Anthoniammal

Sustainable Development & Organic Farming

  • Conventional agriculture relies heavily on chemical fertilisers and toxic pesticides – harm livestock, deplete soil and devastate natural ecosystem
  • Organic farming - whole system of farming that restores, maintains and enhances the ecological balance; increasing demand for organically grown food to enhance food safety
  • Saansad Adarsh Gram Yojana (SAGY) : MPs need to identify and develop one village from their constituencies. To begin with, MPs can develop one village as a model village by 2016, and two more by 2019, covering over 2,500 villages in India.

Benefits of Organic Farming

  • Substitute costlier agricultural inputs with locally produced organic inputs which are cheap
  • Income by exports
  • More nutritional value
  • Requires more labor input
  • Pesticide free and environmentally sustainable way
  • Awareness for new technology
  • More blemishes and a shorter shelf life
  • Limited choice in production of off season crops

1995: Kisan Mehta of Prakruti (an NGO) first suggested that cotton, biggest user of chemical pesticides, could be grown organically. Tested by German Accredited Agency, AGRECO

✍ Manishika