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

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NCERT Class 11 Economics Chapter 6: Rural Development

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  • 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

  • ‘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 Rs 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

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