Chapter-1 Introduction
Dimensions of Rural Development-
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Dimensions of Rural Development-Rural development is a multi-dimensional process which not only includes the ongoing changes in farming and forestry, but also the developments in the rural industry and the service sector. Legal and financial measures of public policy also influence it a lot. But there are some less noticeable driving factors also like; demographic transition, technological innovation, and changes in social structure, consumer preferences and growing public support for environmental protection. 
Fig. 1.3: Dimensions of Rural Development Human Dimension: In addition to demographic trends, it includes the education of the population and the rural social structure and culture, but also the impact of urban life-style changes on the rural areas. Economic Dimension: It covers all the economic aspects of the economy. The relevance of farming and forestry for rural development is declining, while rural industries and service sectors, especially tourism, are gaining importance. Resources and Environment: In the long run, rural development is only possible, if it does not waste essential natural resources, preserves the cultural landscape, does not pollute soils, water and air and safeguards the biological diversity of plants and animals. Other than cities, where we live and work in a highly artificial environment, rural areas depend on natural resources and natural environment for many economic activities, such as tourism, food production, or forestry. Political Dimension: There can be no doubt that political pressure from various interest groups has a great impact on the development of rural areas. It can be illustrated by the fact that developing countries are spending a huge amount of their budgets for development of rural areas -primarily for subsidizing farming. Science and Technology: The rural world is not isolated from the impact of technological change. Especially the revolution in biotechnology and the expansion of communication networks had affected the rural areas a lot. Economy of India-Indian economy, the tenth largest economy of world, is going to touch new heights in coming years. As predicted by Goldman Sachs, the Global Investment Bank, by 2035 India would be the third largest economy of the world just after US and China. Besides this India is the second most populous country in the world, with over 1.21 billion people, more than a 1/6th of the world's population and is projected to be the world's most populous country by 2025 surpassing China. Table 1.5: Relative Growth of Rural and Urban Population in India (1901-2011)
Source: Registrar General of India combined with Census of India: Note : * = Includes projected population of Assam, **= Includes population projection for J&K After India got independence from the colonial rule in 1947, the process of rebuilding the economy started. Despite the impressive progress in the field of science and technology, the rural sector remained underdeveloped. However Five Year Plans focused on the needs of rural economy which gave an immediate attention to agriculture and fast pace to industrial sector to provide employment to the growing population and to keep pace with the developments in the world. Since then the Indian economy has come a long way. Trade liberalization, financial liberalization, tax reforms and opening up to foreign investments were some examples of this. Economic Liberalization introduced by finance minister Dr. ManMohan Singh, proved to be the stepping-stone for economic reform movements. Table 1.6: SWOT Analysis of Indian Economy
The Indian economy continued to be one of the key drivers of global growth, even with its slower GDP growth at 6.5% in 2011-12, compared to a growth of 8.4% achieved in two previous years. Indian economy is predominantly an agrarian economy and basically divided into three sectors: Primary, Secondary and Tertiary sector. Table 1.7: Sectors of Indian Economy
Note : Secondary and Tertiary Sector jointly known as Non-Farm Sector Table 1.8: Sectoral Growth Rates of GDP of India (2004-05 prices)
Source: 1. Monthly Economic Report (March 2012), Ministry of Finance, Government of India 2. Economic Survey 2011-12 Note : Figures in parentheses indicate % shares in GDP. The slowdown of the Indian GDP can be partly attributed to the global factors viz., the slowdown in the world economy, exacerbation of the euro zone crisis, hardening of crude oil prices in the international market, as well as to domestic factors, such as imperatives of dealing with inflation by tightening monetary policy and cutting back on the fiscal stimulus. Sectoral analysis of the growth rates has shown the least inter-temporal variations. With the declining share of agriculture sector and consistent growth in the services sector, the variations in growth rate of the GDP are lately being associated with the variations in the industry. But there has been sluggishness in industrial sector also, which registered a growth rate of 3.9% in FY 2011-12 compared to 7.2% in the previous FY. The growth in agriculture was 2.8%, which is much lower compared to the high level of growth achieved during previous year. With the growth rate just short of double digits, service sector continues to be the mainstay of the economic holding India’s growth together. Therefore non farm sector will continue to play an important role in growth of our country. Indian economy had faced massive changes and has based on monopolistic state controlled policies. At the time of independence the economy was very weak and facing a lot of problems. In 60s, Green Revolution and Integrated Rural Development Programme developed small farms and provided assistance to rural poor through subsidy and credit for employment productive activities. With the liberalization, emphasis is made on sustainable livelihoods, information, communication and technology. Table 1.9: Phases of Rural Development in India
Global trends for open societies and markets fuelled a paradigm shift and the state was ultimately no longer seen as the only engine of production, growth and social equity. New and innovative ideas of micro units challenged the monopoly of state controlled policies which was till the only way to create jobs, overcome poverty and to achieve development. This trend transcends the local barriers and invited local community members, local administration, education and academia, commercial and business partners, media, NGO’s and Governmental organizations for participation in rural development. Most of the rural India is yet to accept this idea. Economic reforms have succeeded in transferring capital from inefficient to efficient sectors, but yet to achieve a corresponding transfer of labour.
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