Kurukshetra : -Rural Non Farm Sector (Part -1)July 2019 (Download PDF)


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Key Topics Included In This Article: - What is Rural Non-Farm Sector, Deendayal Upadhyay Grameen Kaushal Yojana, Deendayal Antyodaya Yojana National Livelihoods Mission, Aajeevika Grameen Express Yojana (AGEY), Status of Rural Employment, Importance of Rural Non-Farm Sector, Mapping Rural Resources for Tourism, Farm Produce & Practices (Farm/Agro/Horti Tourism), Govt. Programme & Policies, Non-Governmental Organizations, Food Processing Sector: Current Scenario, Food processing for livelihood Sustainability, Govt. Initiatives for Food Processing Sector, Swachh Bharat Mission Gramin, Social & Economic Impact of SBM-G, Role of Rural Non-Farm Sector become indispensable for sustaining rural economy. w/non-agricultural activities viz. , mining, quarrying, construction, transport, trade, processing, handloom, handicrafts, tourism & other service.

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Rural Non-Farm Sector: Kurukshetra July 2019 (Examrace - Dr. Manishika Jain) UPSC/NABARD

Rural Non-Farm Sector: Kurukshetra July 2019 (Examrace - Dr. Manishika Jain) UPSC/NABARD

Non-farm sector helps rural households in diversification of their income source & reduce migration to urban areas by providing ample employment opportunities & improved standards of living in their own surroundings.

  • It help in modernizing supply chain in an era where demand for healthy & nutritious food is increasing rapidly.
  • Indian handlooms & handicrafts present a rich tradition in form of beautifully woven cloth & intricate works of art from all regions of country such as cane & bamboo crafts of Assam, Zari & Chikankari works & Gulabi Meenakari of Uttar Pradesh, mirror work & puppets of Rajasthan, Phulkari embroidery of Punjab, Bandhej of Gujarat, coconut shell craft of Kerala, rosewood inlay of Karnataka, Thanjavur paintings of Tamilnadu, Madhubani painting & Sujni art of Bihar etc.
Map location show in Assm Zari & Chikankari works & Bihar

Map Location Show in Assm Zari & Chikankari Works & Bihar

Map location show in Assm Zari & Chikankari works & Bihar

Non-Farm Sector in India

  • Rural India has always been centre of both national as well as international focus. Besides agriculture, traditional handlooms & handicrafts of India like weaving, pottery, etc.

What is Rural Non-Farm Sector?

  • Rural Non-Farm Sector (RNFS) encompasses all non-agricultural activities: mining & quarrying, household & non-household manufacturing, processing, repair, construction, trade & commerce, transport & other services varying in size from household own account enterprises to factories.
  • 2011 & 2015 number of agricultural jobs fell by 26 million while non-farm ones rose by 33 million, according to diff. international studies on India’s labour market.

Different Rural Non-Farm Sectors

Mining & Quarrying

  • Periodic Labour Force Survery (PLFS) by Ministry of Statics & Programme Implementation (MoSPI), percentage of rural males & females employed in this activity is 0.5% & 0.2%, respectively during 2017 - 18.

Contraction & Manufacturing

Proportions of male & female workers in rural areas engaged in ‘contraction’ sector were 14.5% & 5.3%, respectively.

  • PLFS data indicate that 55 % of rural males & 73.2 % of rural females are engaged in agricultural sector. From survey data, a fall in proportion of rural workers engaged in agricultural activities is observed.
  • Rural male workers increased in ‘trade, hotel & restaurant’, ‘transport, storage & communications, ’ ‘manufacturing’ & other services sectors & share of rural female workers increased in ‘manufacturing, ’ other services & trade, hotel & restaurant’ sectors.

How can RNFS be developed?

  • For proper implementation of GOI has introduced a large number of schemes over years to diversify rural population into non-farm activities.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

This scheme intended to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult member volunteers to do unskilled manual work.

Deendayal Upadhyay Grameen Kaushal Yojana

Ministry of Rural Development implements DDU-GKY to drive this national agenda for inclusive growth, by developing skills & productive capacity of rural youth from poor families.

Deen Dayal Antyodaya Yojana-National Rural Livelihoods Mission

Deendayal Antyodaya Yojana national Rural Livelihoods Mission (DAY-NRLM) seeks to reach out to 8 - 9 cr. Rural poor households & organize one woman member from each household into affinity based women SHGs & federations at village level & at higher levels.

Aajeevika Grameen Express Yojana (AGEY)

  • This will help to provide safe, affordable & community- monitored rural transport services to connect remote villages w/key services & amenities (such as access to markets, education & health) for overall economic development of backward rural areas.

Development of Rural Tourism

  • Besides, Ministry of Tourism is promoting Farm Tourism as niche products & is encouraging Home Stay Facilities in rural areas. Many villages in India are gradually undertaking community development programmes to showcase their abilities to outside world by organizing Home Stay Facilities for couple of days.

Strength in Rural Non-Farm Sectors

  • Institutions underlying development of non-farm sector have been strengthened over years. Introduction of JAM Trinity-Jan Dhan, Aadhar & Mobile has increased share of total disbursement of money in non-farm sectors.
  • Challenges in Rural Non-Farm Sectors

Regulatory restrictions on small sectors

  • Regulation of small scale sector constitutes an important aspect of non-farm development policy in India.
  • In initial stages, capital investment restrictions were imposed to protect small scale sector, especially in rural areas, from predations by large industry.

Non-Farm Sector for Employment Generation

  • w/trade liberalization, reservations for small scale industries were replaced w/Micro, Small & Medium Enterprises (MSME) Act. It is to promote MSME, enterprises but it is reported to have urban biases.
  • Employment in construction is influenced by many factors, such as policy of extending basic infrastructure like roads, growth of population & specific economic policies.
  • Services actually consists of community social personal services (CSPS), which are largely under public domain. Govt. emphasis on social overhead may increase employment in CSPS.
  • Finance insurance real estate business services (FIREBS) are mostly private initiatives. Increased investment in infrastructure may increase quality of real estate & consequent employment in real estate business.
  • Transport storage communication (TSC) is another sector which has registered an increased share in rural employment. Employment in TSC is influenced w/increase of investment in infrastructure such as road & storages.

Importance of utilities in rural sector has increased in recent years w/decreasing & degrading natural resources.

  • Residual sector hypothesis for growth of employment in RNFS was propounded by Vaidyanathan (1986). He argued that in a situation where labour absorptive capacity of agriculture become limited & urban industrial sector is not able to accommodate ever growing labour force RNFS tends to act as sponge for surplus labour.
  • In dearth of development induced growth of RNFS, a significant proportion of rural non-farm labour remains poor. They are widely referred to as working poor.
  • Conclusions
  • Study based on development experience argues that productivity growth in agriculture, manufacturing & tourism are important to trigger growth of productive employment in other sectors of rural economy.
  • Incentives can be in form of creatures (CFCs) & incentives like cheap electricity.
  • A robust growth of rural manufacturing requires massive investments in skill formation & entrepreneurship development. Often there is demand for a single window integrated service centre to promote rural non-farm sectors.
  • (MGNREGS) such programmes implemented at distress wages will after positively other sectors of economy; however this should be based on needs of region.


  • RNFS includes all non-agricultural activities. Mining & quarrying, household & non-household manufacturing, processing, repair, construction, trade & commerce, transport & other services in villages & rural towns undertaken by enterprises varying in size from household own account enter prices (OAEs) to factories.

- Published/Last Modified on: August 18, 2019


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