Project Report- ECONOMICS

8/17/2019 Project Report- ECONOMICS

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ManagementDevelopment Institute

Murshidabad

Project Report on:

Economic Problems in Rural India

Mentor: Dr. Dilip Halder

Submitted B: !MI" #$M!R %&'P(PM)*+

,ontents:


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Introduction

-bjective

Deining Rural Poor

Deining Problems

Some of the major problems faced for

rural development in India

Some o the acts on major basic problems /ith the

livelihood %!ccording to Socio0Economic and ,aste

,ensus+

,onclusion

Introduction

"India lives in its villages" - Mahatma Gandhi


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This famous observation made by the Father of the Nation many years ago, still holds true.

Villagers comprise the core of Indian society and also represent the real India. And it is for these

villagers that we need to make sure we build a system that delivers basic social infrastructure in

an effective manner. In order to ensure that the fruits of Indias progress are shared by all sections

of the society, the government has identified several elements of social and economic

infrastructure, critical to the !uality of life in rural areas. "ell, before we discuss in detail about

the services and facilities being planned and provided by the government, its important to know

what constitutes the rural sector in India.

1hat is rural sector or /hich place can be deined as rural area2

The #rural sector# means any place as per the latest census which meets the following criteria,

A population of less than $,%%%

• &ensity of population less than '%% per s! km and

• (ore than #)$ per cent of the male working population# is engaged in agricultural

pursuits.

*ver seventy per cent of India+s population still lives in rural areas. There are substantialdifferencesbetween the states in the proportion of rural and urban population varying from

almost -% per cent in Assam and ihar to /0 per cent in (aharashtra1. In much of India thetypical village dwelling is a modest one2story mud hut of one or several rooms. 3oofs aregenerally flat in the dry regions and peaked in areas of heavier rainfall. (ost houses have nowindows, but many have a shaded veranda where social activities take place. A cubicle or acorner of the yard is set aside for the kitchen hearth, normally containing an earth stove fueled bycow dung or firewood which says Indian rural people are still living before independence period in this )0st century.

-bjective

Problems o rural Indian societ


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Though India is known as the classical land of the villages her rural societies are not free from problems.Indian rural society is facing many social problems since long back.The 3ural 4ocietyof India is very much backward. It backwardness is very much due to the several problems thathaunt the 3ural 4ociety. The process of change is very slow and so the problems are more or less ageold in recent years, the process of change has been accelerated and sonew problems are

also cropping up.The ma5or problems consist of the agriculture, the ownership of the land, the lack of cottageindustries, lack of education social evils, death ofanimal, wealth, bad wealth and so on. These problems are the result oftraditionalism and conservatism of the 3ural 4ociety. The problemsofthe villages may be studied under the following heads6

The economic problems

The problems concerning agriculture

The problems of poverty

The problems of population and the family planning

The problem of sanitation

The problem of corruption The problem of education


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8orruption perceptions map for Indian states based on a Transparency International survey in

)%%$. &arker regions were perceived to be more corrupt.These corruption indices have been

changing. ihar perceived as among most corrupt in )%%$, was among least corrupt in )%00.

Through the T48, the Indian 7overnment hopes to stimulate the demand for sanitation facilities

in its less2urbani?ed areas, rather than to continually provide these amenities to these areas

residents. This is a two2pronged strategy, where the people involved in this program take

ownership and better maintain their sanitation facilities, and at the same time, reduces the

liabilities and costs on the Indian 7overnment. This would allow the government to reallocate

their resources to other aspects of development.Thus, the government set the ob5ective of

granting access to toilets to all by )%[email protected] meet this ob5ective, incentives are given out to

encourage participation from the rural population to construct their own sanitation amenities. In

addition, the government has set out to educate its people on the importance and benefits of

proper sanitation through mass communication and interpersonal communication techni!ues.

This is done through mass and print media to reach out to a larger audience and through group

discussions and games to better engage and interact with the individual.

!gricultural problems

Agriculture is the largest and one of the most important sector of the rural economy andcontributes both to economic growth and employment. Its contribution to the 7ross &omestic9roduct has declined over the last five decades but agriculture still remains the source of livelihood for over @% per cent of the country+s population. A large proportion of the rural work force is small and consists of marginal farmers and landless agricultural labourers. There issubstantial under employment among these people both wages and productivity are low. These


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in turn result in poverty it is estimated that B)% million people are still living below the povertyline in rural India.

Povert

India suffers from substantial poverty. In )%0), the Indian government stated )0.-C of its

population is below its official poverty limit. The "orld ank, in )%00 based on )%%$s 999s

International 8omparison 9rogram estimated )B./C of Indian population, or about )@/ million

people, lived below D0.)$ per day on purchasing power parity. According to Enited Nations


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(illennium &evelopment 7oal (7&1 program )@% million or )0.-C people out of 0.) billion

of Indians lived below poverty line of D0.)$ in )%002)%0) as compare to '0./C in )%%'2%$.

*fficial figures estimate that )@.$C of Indians lived below the national poverty line in )%%'

)%%$.A )%%@ report by the state2run National 8ommission for =nterprises in the Enorgani?ed

4ector N8=E41 found that )$C of Indians, or )B/ million people, lived on less than )% rupees

per day with most working in #informal labor sector with no 5ob or social security, living in

ab5ect poverty.

The Rural Poor: Who Are They?

The rural poor depend largely on agriculture, fishing, forestry, and related small2scale industries

and services. To understand how poverty affects these individuals and households, and to

delineate the policy options for poverty reduction, we first need to know who the rural poor are.

The rural poor are not a homogeneous group. *ne important way to classify the rural poor is

according to their access to agricultural land6 cultivators have access to land as small landownersand tenants, and non2cultivators are landless, unskilled workers. There is, however, much

functional overlap between these groups, reflecting the poverty2mitigating strategies of the poor

in response to changes in the economy and society.

Cultivators, who form the bulk of the rural poor in developing countries, are directly engaged in

producing and managing crops and livestock. 4ince these households cannot sustain themselves

on the small parcels of land they own or cultivate, they provide labor to others for both farm and

nonfarm activities inside and outside their villages. 4ome members of these households migrate

to towns or cities on either a rotational or a long2term basis. In many countries, both small

landowners and tenants are under increasing pressure to get out of the agriculture sector altogether. Enderlying this process of #depeasanti?ation# are market forces and policies affecting

landholdings, rents, prices, credit, inputs, and public investment in social and physical

infrastructure.

Non-cultivators are perhaps the poorest among the rural poor. Their numbers have been rising

rapidly because of the natural increase in population and depeasanti?ation. These workers depend

on seasonal demand for labor in agriculture and in rural informal, small2scale industries and

services. The landless rural workers are vulnerable to fluctuations in the demand for labor, wage

rates, and food prices. They find it even more difficult than small landowners and tenants to gain

access to public infrastructure and services. In addition, unlike their counterparts in urban areas,

they are often e>cluded from public sector safety nets food rations, for e>ample1.

Rural women tend to suffer far more than rural men. Their poverty and low social status in most

societies is a ma5or contributor to chronic poverty. 4ubstantial evidence from many countries

shows that focusing on the needs and empowerment of women is one of the keys to human

development.

ow Rural Poverty Is Created


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Numerous characteristics of a countrys economy and society, as well as some e>ternal

influences, create and perpetuate rural poverty6

G 9olitical instability and civil strife

G 4ystemic discrimination on the basis of gender, race, ethnicity, religion, or caste

G Ill2defined property rights or unfair enforcement of rights to agricultural land and other

natural resources

G ;igh concentration of land ownership and asymmetrical tenancy arrangements

G 8orrupt politicians and rent2seeking public bureaucracies

G =conomic policies that discriminate against or e>clude the rural poor from the

development process and accentuate the effects of other poverty2creating processes

G ternal shocks owing to changes in the state of nature for e>ample, climatic changes1

and conditions in the international economy.

iases in national economic and social policies can contribute to rural poverty by e>cluding the

rural poor from the benefits of development and accentuating the effects of other poverty2

creating processes. 9olicy biases that generally work against the rural poor include6

G Erban bias in public investment for infrastructure and provision of safety nets

G Implicit ta>ation of agricultural products through so2called support prices and an

overvalued e>change rate

G &irect ta>ation of agricultural e>ports and import subsidies

G 4ubsidies for capital2intensive technologies

G Favoring e>port crops over food crops and

G ias in favor of large landowners and commercial producers with respect to rights of land

ownership and tenancy, publicly provided e>tension services, and access to subsidi?ed1 credit.

These policies can have both short2 and long2term effects on the rural poor. The effects are

particularly significant in the conte>t of the structural ad5ustment programs that many developingcountries have undertaken to restore macroeconomic stability and e>pand the capacity of the

economy to increase production, employment, and incomes.

Overpopulation


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The population of India is an estimated 0.)@ billion. Though India ranks second in population, it

ranks BB in population density. Indira 7andhi, 9rime (inister of India had implemented a forced

sterili?ation program in the early 0-@%s but the program failed. *fficially, men with two children

or more were re!uired to be sterili?ed, but many unmarried young men, political opponents andignorant, poor men were also believed to have been affected by this program. This program is

still remembered and regretted in India, and is blamed for creating a public aversion to family

planning, which hampered 7overnment programs for decades.

Educational problems

"hile many schools were built, they had poor infrastructure and inade!uate facilities. 4chools in

the rural areas were especially affected. According to &istrict Information 4ystem for =ducation&I4=1 in India in )%%-, only about $0.$C of all schools in India have boundary walls, 0/./$C

have computers and B-C have electricity. *f which, only /.'@C of primary schools and BB.'C

of upper primary schools have computers, and only )@.@C of primary schools have electricity.


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Sanitation


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doing business, and compared to 8hina and other lower developed Asian nations, the average

time taken to secure the clearances for a startup or to invoke bankruptcy is much greater.

Some o the major problems aced or rural development in India are as ollo/s:

0. The financial, manpower and managerial resources devoted to the implementation of ruraldevelopment programs are utterly inade!uate.

). etter implementation of rural development programs can be ensured only if those responsible

for actual implementation are paid reasonably well, appropriately trained, and sufficiently

motivated. ut this has not been done as yet.

B. It is being increasingly observed that the ob5ectives of one program conflict with those of

others, and there is no institutional mechanism for reconciling them. 8onse!uently, many

programs utterly fail in fulfilling their ob5ectives. In addition, they also affect other programs.

'. In many cases, instruments of rural development are not properly selected, and their levels are

not consistent with the ob5ectives they seek to achieve. The is results in the wastage of valuable public resources, and unnecessary delays in achieving the ob5ectives.

$. ;onesty, hard work, helping others, thrift and such other virtues indirectly help in economic

development. In the Indian conte>t, not much attention has been paid to this aspect of

development.

/. *bservance of rituals, lack of rational decisions in economic matters, spending huge amounts

of money on marriage, birth or death ceremonies, prevalence of the caste system and the 5oint

family system in the rural areas and illiteracy are some of the factors which arrest the rural

development in India.

@. The political parties have a vital role to play in rural development. ut unfortunately this role

has not been effectively reali?ed by any democratic political party so far. The political parties,

today, are guided more by party interests rather than by national interests.

In fine, the removal of these problems will accelerate the process of rural development in India.

The role of governmental and non2governmental organi?ations in this regard is, indeed,

commendable. ut much remains to be done. If we all work together with undivided attention in

this direction we can surely achieve success. The India of 7andhi5i+s dream would be a reality.

"e are living with that hope.

Some o the acts on major basic problems /ith the livelihood %!ccording to Socio0

Economic and ,aste ,ensus+

Po/er :

• /B C of all rural households in India do not have electricity

• 0%20$ hours of blackouts


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• 4hortfall of about 0$%%%2)%%%% (" of electricity in the country.

1ater Scarcit :

• 3ural India depends on water for farming.

• Farming takes :%C of India+s water.

• 4carcity of water leads to crop failure on a large scale.

•


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from the urban slums back to the villages. 3ural &evelopment is the sub5ect to come to theforefront after the economic reforms and rural banking will serve the backbone of thisdevelopment.

Documents

Project Report- ECONOMICS