Source: eurac research
India, a country of 1.3 Billion people, an economy of 3 Trillion dollars. Fitch Ratings predicted that the Indian economy will grow by 11% in the year 2021-2022. Most of us think that most part of the economy comes from Urban areas. Is it so? Let's find out how the rural economy is contributing to the growth of a nation.
According to the reports by NITI Aayog, 70% of the workforce in India lives in rural areas and contributes up to 46% of national income. It is projected that 50% of the population in India will live in rural areas by 2050.
When it comes to rural areas, agriculture plays a key role in increasing rural income and employment. But it is not the only sector. Other sectors like manufacturing, construction, services, and other non-farm sectors like poultry, dairy, fishing, forestry are also contributing 48.7 percent of rural employment. Here is data showing the share of rural areas in total Net Domestic Product and Employment across different sectors during the years 1970 to 2012
Figures shown are in percentage
Source: NITI Aayog
The above figures show promising results in Rural employment and the economy. In the past few years, the government has invested a lot of money in rural areas, which indeed became helpful for the growth of the nation. There are three main features of the rural economy which led to the growth of the rural economy.
1. Commercialization of agriculture
Indian villages have always been self-sufficient. In the early 90s, they grew their own food, produced cotton, and oilseeds, everything for their own requirements. But it's not the same anymore. Villages need to supply food to the outside world to meet the needs of people outside villages. The rural economy has opened up, and it made the commercialization of agriculture possible. The commercialization of agriculture brought drastic changes in the rural economy.
The factors which contribute to the agricultural commercialization are as follows:
2. Impact of Urbanism
Earlier the contacts between rural and urban areas were limited to basic necessities. But the situation is changing now. An increase in road transport and communication mediums like radio, television, and mobile phones have brought rural areas closer to the urban areas. An increase in contacts between these two areas made an impact on rural life. They quickly absorbed the culture of urban areas. As a result, rural areas have become a potential market for industrial goods. Observing the change, many industries have set their foot in rural areas.
Contacts between rural and urban areas have spread awareness among the people living in rural areas about consumer goods. The income of rural masses has increased due to the green revolution which led to the consumption of consumer goods.
New agriculture technology has made work easier than before. It increased the supply of industrial goods like fertilizers and machinery. It resulted in an increase in repair and maintenance services, which is inevitable as the machinery is involved in the process.
Above mentioned reasons have increased the demand for industrial goods and services in rural areas resulting in economic growth and an increase in employment opportunities.
3. Institutional Participation
The Government of India has always focused on Rural development and reconstruction. After independence, states took responsibility for rural reconstruction which helped the government to focus on local problems. They introduced various reforms, laws, and development programs to bring modernization in villages. The new economic policy made a major impact on the rural economy bringing a more transparent and safer medium to trade and providing farmers a new platform of opportunities with the green revolution. This is clear from the statement given by the finance minister in parliament quoting, “It is my firm belief that sustained and broad-based growth of agriculture is essential for alleviating poverty, generating incomes and employment, assuring food security and sustaining a buoyant domestic market for industry and services”
The finance minister made it very clear that agriculture is the backbone of the Indian economy and the growing rural economy is the only way to solve nationwide problems.
We at KhedutPay ensure that the needs of farmers are fulfilled hasslefree. We have created a technology-based e-commerce platform where farmers can reach and sell rural products to the masses. We also offer necessary supplies for farming to farmers at affordable prices.
For more information, visit us at www.khedutpay.com.
