What's New :
UPSC CSE Result 2023.Download toppers list

Rural economy needs a new deal

  • Category
  • Published
    6th Jun, 2022


  • Covid-19, the Ukraine war, and the climate crisis show that policymaking for rural India should shift fromcasual approach to one that invests in long-term risk management.


  • At the beginning of the green revolution, between the 1970s and 1980s, the growth rate of agricultural remains high in Uttar Pradesh.
  • In the 1990s, the substantial loss is suffered by the farm economy as the growth space brings by the Green revolution may be used up. Such as the decline in the outputs of Cereal crops, wheat, and groundnuts.
  • After the period of the liberalization, the growth of the food grains stayed behind the increase in the population between 2000 and 2001 and the Total factor productivity show a decreasing trend from 1993.
  • The rural economy with slow growth pace has developed to a high-speed growth economy after the liberalization in economic and the improvement in the facilities.
  • The launch of new economic policies leads to a decline in the output of food grains and an increase in non-food crops such as cotton.

Need for revival of rural economy

  • Global conditions: Three catastrophic global events — the coronavirus pandemic, the Russia-Ukraine war, and the climate crisis — have made visible sources of precarious resilience and fragility in India’s rural economy
    • India is grappling with rising food inflation and slowing rural demands.
  • For pushing economic growth: However, in 2020-21, agriculture was the only sector of the economy that remained strong, growing at 3.3%. 
    • In 2021-22, the sale of rice and wheat via government schemes was as high as 6 million tonnes.
  • Source of employment:Agriculture, long considered the employer of last resort for policymakers, emerged as the only employer and primary safety net for millions of Indians amid the pandemic.

Cause of decline in rural economy

  • Disruptions in demand and supply chain:
  • Rising Inflation
  • Pandemic and shutdowns
  • Failure of governmental schemes

Why rural economy for India is important to attain its future goals?

  • Targeting policy support and investment in rural areas to build vibrant food systems and supporting agro-industries will allow more inclusive economy to thrive towards a $5 trillion mark.
  • Transformed rural economies will generate much-needed jobs and will contribute to making out-migration to urban areas a more of a choice, rather than a necessity. This would reduce pressure on urban areas and would allow better urban planning and growth.
  • Increase in agricultural production and the rise in the per-capita income of the rural community, together with the industrialisation and urbanisation, would lead to an increased demand in industrial production and thus economic growth.
  • Without reaping demographic dividend locked in rural areas it is not possible to reach $5 trillion economy mark before 2022.
  • The lessons drawn from the economic history of many advanced countries tell us that agricultural prosperity of rural areas contributed considerably in fostering economic advancement.
  • Rural and agricultural advancement is necessary for improving the supply of raw materials for the agro-based industries especially in developing countries.
  • The progress in agricultural sector provides surplus for increasing the exports of agricultural products. An increase in the exports earning is more desirable for economic growth.
  • The development requires roads, market yards, storage, transportation railways, postal services and many others for an infrastructure creating demand for industrial products and the development of commercial sector.

Waysto attain a better of rural economy

  • Promoting education: Education of the masses by establishing evening schools for adults in villages.
  • Reduce out of the pocket expenditure: Provisions for cheap medical aid through Ayurveda and Herbals – Naturopathy and Yogic Science should be promoted for affordable and accessible healthcare.
  • Improving Infrastructure: Construction of good roads and infrastructure is important to make roadways for economic growth.
  • Incorporation of civil societies: Establishment and promotion of the Co-operative Credit Societies to promote Self Help Groups of that particular Local area.
  • Promoting Agro-based industries: Co-operative system should be promoted in Agro based Industries and the advantages of the government schemes should reach to the last section of the society.
  • Providing crop insurance: Banks should not ridicule the crop Insurance scheme run by the central government. They should extend their best possible support in every way to our innocent farmers.


Rural development is a must for the economic development of a country. Agricultural progress is essential to provide food for growing non-agricultural labour force, raw materials for industrial production and saving and tax revenue to support development of the rest of the economy, to earn foreign exchange and to provide a growing market for domestic manufactures. So supportive public policies and investments will be key to harnessing demand as an engine for transformative and equitable growth, and measures designed to ensure market participation by small-scale, family-farmers must be hard-wired into policies.


Verifying, please be patient.

Enquire Now