Chapter-1 Introduction

Rapid economic growth has created a growing need for dependable and reliable supplies of electricity, gas and petroleum products also. India targets to electrify 14500 villages and release electricity connection to 52 lakh BPL rural households in 2011-12. With increasing primary education students, the need for teachers in rural areas can be tapped as alternative livelihood option by the literate youths. To establish a sizable network of rural education Gandhigram Rural Institute was established and 5,200 Community Development Blocks (an authority under national programme to control education in up to 100 villages) were established. Nursery schools, elementary schools, secondary school, and schools for adult education for women were set up in rural India. Under National Rural Health Mission, almost 106949 more skilled service providers were added in the public health system by March 2010. Besides this agro processing industry is employing about 13 million people directly and 35 million people indirectly in India.

Thus NFS is continuously grooming in our Indian economy in terms of its share in both employment and output. Out of the all non-farm activities Trade, hotel, transport and communication is the highly grooming activity followed by Financing, Insurance, Real Estate and Business Services; Manufacturing; Construction; Community, Social and Personal Services; and lastly Mining and quarrying.

Out of the non-farm sector during 1973-74 to 2009-10, tertiary sector had shown a remarkable growth of 12% and 23% in employment and output respectively as compared to growth of 11% and 3% in secondary sector in employment and output respectively. Proportion of agriculture in total employment has declined over the years from 74% in 1972-73 to 51% in 2009-10. It is particularly important to note that the decline in the employment share of farm sector has been much slower than the share of GDP from agriculture. The share of agriculture in GDP declined from 41% in 1972-73 to 15% in 2009-10 (Table 1.21).

Linkages between Farm and Non-Farm Sector-

As a result of emerging green revolution technologies, increased farm activities and productivity magnified the incomes of farmers by multiple linkages and effect across the rest of the economy, particularly in closed economies, which was in practice the case of many developing rural economies. A large subsistence farm sector now exists only along with modern non-farm sectors of the economy. Basically both the sectors share two types of linkages. These are production linkages, both backward, via the demand of farmers for inputs (plows, engines, tools, fertilizers, insecticides, irrigation structures etc.), and forward, via the need to process many farm produces, e.g., spinning, milling, canning etc. Consumption linkages are also important: as farm income rose, it would feed primarily into an increased demand for goods and services produced by non-farm sector. Moreover the increased farm productivity will provide new farm surpluses as an automatic source of investment funds for the non-farm sector.

Farm and allied produces (fruits, vegetables, tea, coffee, spices, livestock, fisheries, forestry products etc) are the backbone of NFS. Farm produces provide various raw materials to the industrial sector i.e., horticulture products in Food processing Industries; Flowers in Cosmetics Industry; silk, wool, cotton in Garment Industry; honey in industries manufacturing honey products; Poultry products in industries manufacturing various bakery products etc. In the same way the farm sector is also getting various inputs (fertilizers, insecticides, irrigation structures, infrastructure, markets for farm produce etc) and services (transportation, communication, banking, financial services etc) from NFS.