Name- Anurag Shukla

Enrollment No.- m2021se003

 FC-2 Assignment

Ques.No.-3
Reflect on the current status of India’s rural economy and the
importance of livelihood creation in rural areas?
India is well-known for its agriculture, as most villages depend on agriculture and
its allied products. Agriculture holds a significant portion of the country's GDP.
Farming is the primary source of income in rural India; with 70% of the population
living in villages, India is primarily a rural economy. The rural economy of India
constitutes both farm and non-farm sectors with 46% of the national income and
25% to 30% of India's GDP.
The Indian economy contracted by a historic -23.9 percent during the Covid-19
lockdown. The whole country felt the effects of this unprecedented circumstance,
but the rural sector emerged as a bright spot for the Indian economy. There were
two leading causes for rural India's unexpected rise during the pandemic. First and
foremost, a good monsoon season - increased availability of water in reservoirs for
irrigation, increased sowing acreage area of Kharif crop; second, free food grains
under the PM Garib Kalyan Ann Yojana; and third, effective execution of
MGNREGA (100 days of guaranteed work program) and lastly, direct cash
transfers through PM Kisan Nidhi Yojana to small farmers.

Since 2000, India's per capita GDP in rural areas has increased by 6.2 percent.
More than 60% of India's population is still involved in agricultural activities for
livelihood and survival, demonstrating agriculture's dominance in the Indian
economy. However, there has been a progressive movement in rural India's
agricultural occupation to non-agricultural, and rural India's non-farm income has
grown in recent years. People in rural areas are constantly searching for alternative
employment opportunities due to the lack of modern agricultural methods and
practices leading to low productivity levels. Furthermore, the more educated and
informed rural youth want to work in jobs that match their skills and expertise.
Children are apprehensive about following in their forefathers' footsteps because
they do not see agriculture as having a prosperous future.
Today, the importance of livelihood creation in the rural sector felt rapidly. Many
marginal farmers or rural people and their involvement in rural activities make
them feel to indulge in other non-farm activities for many reasons.
  Poverty is predominantly a rural phenomenon - Small landholdings,
unbearable interest amounts on loans, and low productivity are the sources
of poverty for families who rely on farm-based activities for a living. Due to
a lack of physical and social capital, a significant portion of the population is
obliged to seek employment in low-productivity and low-paying
occupations.
 Increasing unemployment among youths- The unemployment rate in India
is steadily rising, not only in cities but also in rural areas. Rural people
migrate to urban cities in search of work, but they cannot find a job during
this uncertain period, resulting in inefficiency and other negative
repercussions.
 Agriculture and allied industries- It is critical to provide better road
connectivity, tap water through the Jal Jeevan Mission, rural banking, stable
internet, power, and biogas to boost the rural economy. Similarly, initiatives
for rural artisans and warehousing facilities for farmers are critical to
improving villages' lives and economies.
 Cottage and small-scale industries- Apart from that, concentrating on the
growth of cottage and small-scale industries will be critical in increasing the
rural economy. Because even untrained and semi-skilled people can work in
small-scale and cottage businesses, generating more jobs and entrepreneurs
than the organized industry.
 Migration- Many rural residents rely on rural livelihoods, either directly or
indirectly. However, they travel to metropolitan areas due to a lack of
possibilities in their immediate surroundings. People working in the informal
sector and laborers came back during the lockdown and are now hesitant to
return due to the negative impacts of Covid-19. So, they are in search of
livelihood in their respective hometown.
 To achieve bigger goals- If India wants to reach its goal of a 5 trillion-
dollar economy, Atmanirbhar Bharat, Local for vocal, SDGs, or inclusive
growth, it needs to focus more on the rural sector, a significant contributor to
its GDP.
 Making rural economy resilient to natural calamities- Almost 60% of
rural people are dependent on the weather and are vulnerable to natural and
climate calamities. During the monsoon season of 2020, we had a lot of rain,
which displaced cattle and livelihoods in villages. So, to protect individuals
who are entirely reliant on farming, they must have alternatives to
agriculture as a source of income.
Understanding these livelihoods is crucial to understanding rural problems, the
resulting human suffering, unproductivity of youth, and its pressures on overall
economy and addressing it.