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Indian Economy

Indian Economics and Development

We have often heard it being said that India is a developing country, on the verge of being a developed country. And while this is true, there is still a big divide in our country between rural and urban development. Let us see the progress of Indian economics, especially in the rural sectors.

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Introduction to Indian Economics and Development

The main source of livelihood in the rural sector is Agriculture. There is a need to develop rural India due to the reason that almost one-third of rural Indians live in a state of poverty.

Rural development refers to the process that involves economic well being and quality of life. It focuses on the action for the development of areas that lags in development of the village. The standard of living of the rural people is constantly improved undertaking the process of rural development. The main objective of rural development are –

  • In order to increase the income of the farmers, the productivity of the agricultural sector is also increased.
  • It acts as a way for generating alternative means of livelihood in the rural areas so that there is a reduction in the dependency of the agricultural sector.
  • Human development may also achieve in an attempt to promote education and health facilities.

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Key Areas in Rural Development

The key challenges faced and the new initiatives that are needed for the rural development are –

  • Each locality requires the development of the productive resources.
  • Honest implementation of land reforms.
  • Development of human resources like health including the focus on sanitation and public health.
  • Focus on development of human resources like literacy with the major focus on female literacy, education as well as skill development.
  • Development in infrastructure like irrigation, credit, marketing, electricity facilities.

Indian Economics

Rural Credit

The major lifeline of the farming activity is credit. Rural credit refers to providing credit for the community of the farmers. It is an important art of India economics. The farmer requires credit because major farmers in India belong to a small community and are marginal landholders who practice the method of subsistence farming. However, they have no surplus further production.

The period between the sowing and harvesting is pretty high allowing them to borrow to fulfil the need during this time. The borrowings may help the farmers in following ways –

  • Productive Borrowing: These borrowings include loans to help them buy fertilizers, agricultural equipment.
  • Un-Productive Borrowing: These borrowings include loans to help them for social purposes including marriages and occasions during the festivities.

Types of Rural Credit

The credit needs of the farmer are classified as –

  • Long-term Credit: These long-term credits are required to acquire permanent assets including land, tractors and are for a period of 5 years to 20 years.
  • Medium-term Credit: These medium-term credits are required to acquire machinery, building fences and are for a period of 1 year to 5 years.
  • Short-term Credit: These short-term credits are required to buy tools, seeds, manure and also fertilizers by the money lenders, banks, cooperatives and last for a period of 6 to 12 months.

Solved Question for You

Q.1: Why do different persons have different notions of development regarding Indian economics? Which of the following explanations is more important and why?

(a) Because people are different.

(b) Because life situations of persons are different.

Solution: According to it, the explanation that – Because life situations of persons are different is more important as the requirements vary in accordance to the living conditions of people. Further, it is known that the people seek for those things that are most important and essential to them and those things that can fulfil their aspirations as well as desires.

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