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Indian Economy - Features of Rural Economy | 11th Economics : Chapter 10 : Rural Economics

Chapter: 11th Economics : Chapter 10 : Rural Economics

Features of Rural Economy

Main characteristics of rural economy are:

Features of Rural Economy


Main characteristics of rural economy are:


1.        Village is an Institution: The Village is a primary institution and it satisfies almost all the needs of the rural community. The rural people have a feeling of belongingness and a sense of unity towards each other.


2.        Dependence on Agriculture: The rural economy depends much on nature and agricultural activities. Agriculture and allied activities are the main occupation in rural areas.


3.        Life of Rural People: Lifestyles in villages are very simple. Public services like education, housing, health and sanitation, transport and communication, banking, roads and markets are limited and unavailable. Rural people rely much on faith, superstitions and traditional cultural practices. The standards of living of majority of rural people are poor and pitiable. In terms of methods of production, social organization and political mobilization, rural sector is extremely backward and weak. In recent years, the incidence of alcohol drinking has gone up.


4.        Population Density: Population density, measured by number of persons living per sq. km is very low and houses are scattered in the entire villages.


5.        Employment: There exists unemployment,seasonalunemployment and underemployment in rural areas. Unemployment refers to the situation of people with willingness and ability to work but is not getting employed. Underemployment also called disguised unemployment is the situation of people employed in excess, over and above the requirement. Disguised unemployment is a situation Where people work but no increase in production. Both the situations are common in rural areas.


6.        Poverty: Poverty is a condition where the basic needs of the people like food, clothing and shelter are not being met. According to the 2011-12 estimates, About 22 crores of people in rural areas are poor and live below the poverty line.


7.        Indebtedness: People in rural areas are highly indebted owing to poverty and underemployment, lack of farm and non-farm employment opportunities, low wage employment, seasonality in production, poor marketing network etc. A famous British writer Sir Malcolm Darling (1925) stated that ‘An Indian farmer is born in debt, lives in debt, dies in debt and bequeaths debt’. Since formal loan facilities are not available to the villagers, they depend on local money lenders who, like a parasite, squeeze the villagers. Hence the villagers commit suicide frequently.


8.        Rural Income: The income of the rural people is constrained as the rural economy is not sufficiently vibrant to provide them with jobs or self – employment opportunities.


Large proportion of labourers and skilled persons are underemployed and the scope for increasing their income is limited.


9.        Dependency: Rural households are largely dependent on social grants and remittances from family members working in urban areas and cities.


10.   Dualism: Dualism means the co existence of two exteremely different features like developed and underdeveloped, organised and unorganised, traditional and modern, regulated and unregulated, poor and rich, skilled and unskilled and similar contradicting situations in a region. These characteristics are very common in rural areas.


11.   Inequality: The distributions of income, wealth and assets are highly skewed among rural people. There are number of historical, social, economic and political reasons behind the existence of inequality. Landlords and landowners dominate the rural activities. Land, livestock and other assets are owned by a few people.


12.   Migration: Rural people are forced to migrate from villages to urban areas in order to seek gainful employment for their livelihood. This character of the development gives rise to the formation of cities. Enmity and Lack of basic amenities in rural areas also push the people to migrate to urban areas. This is called’ double poisoning’ by Schumacher, one side villages are empty, on the other side towns are congested. His book is ‘’ Small is Beautiful “describes the dangers of the present kind of development.


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