Chapter-1 Introduction

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Constant development is the law of life, and a man who always tries to maintain his dogmas in order to appear consistent drives himself into a false position.”

Mahatma Gandhi

Development is a continuous process of positive changes having no ultimate limits and end. It is not a cluster of benefits given to the people but rather a process by which a populace acquires a greater degree of mastery over its own destiny. Everyone whether it’s a human being or a country wants to attain growth and to be developed. It is an attempt to ‘move’ men.1 Development means modernization and modernization means transformation of society. It as an objective and as a process both embrace a change in fundamental attitudes to life and work in social, cultural and political institutions.2

Its importance has been tremendously increased in this cut throat competitive world. In today’s globalized world countries are facing the challenges of economy development and its allied problems. They all want to reap the benefits of LPG (liberalization, privatization, and globalization) model. They are striving for sustainable development3 and increased international markets’ share for survival.

Now the Government’s goals are to accomplish a developed nation, with high levels in education and social equality, and meet the challenge of bolstering its democracy with more opportunities for the population4. The underdeveloped nations are expanding their industrial and agricultural sectors and enhancing their domestic savings. While targeting these goals they must consider two facts. Firstly, the development should be what they gain in future and secondly the growth should be universal not by indicating one or two areas. An economy is not a single term but a cluster of many sectors and countries should pay attention towards development of each sector to make maximum utilization of its potentials and only then they can have an overall development.

A country’s development basically depends on the growth of two sectors; Urban Sector and Rural sector. Rural sector involves farm and allied activities and production of raw materials for heavy industries while urban sector involves industrial/ non-farm activities and production of industrial goods. Sincere efforts are required for development of both the sectors within the limitations of availability of capable resources. But the development of rural sector becomes more important for a developing country like India where about 70% of total population lives in rural areas. Mahatma Gandhi once said that real India lives in villages.

Since India started on the path of liberalization by opening up of its economy, much has been done in almost every sector and its emergence as a glorious country with immense potentials for development is being acknowledged at global level. In this direction rural sector played an important role. According to a study by HDFC bank the Indian rural sector accounts for 48% of its total GDP.

According to IMF India has the 10th largest economy in the world in 2011 with a GDP of 1,826,811 US $. India ranked 134th position out of 187 countries on the UN's HDR 2011, which takes into account social, health and educational conditions in a country.1 The World Bank suggests that for achieving the economic potential, India must focus on public sector reforms, transportation, infrastructure, removal of labour regulations, agricultural and rural development, education, energy security, and public health and nutrition.

Despite of the facts of glorious journey, India has not been able to grow commensurate with its potential due to some crucial socio-economic problems. For alleviating these problems, rural poor has to be uplifted through better facilities of education, infrastructure, employment, economy and other basic civic amenities. Acknowledging the rural distress, the Indian Government has declared the development of rural areas as a top national priority (National Common Minimum Programme, 2004). Indian policy makers usually prepare policies separately for both the sectors because both have different needs which have to be addressed separately.

What is Rural-

The economies of the world are split between two main groups of people which are not based on religion or race, but the living standards between the urban & rural areas. It is difficult to make all the countries agreed on a uniform definition of ‘rural area’ applicable to every situation, since population-carrying capacity is partly ecologically determined, and since what is ‘urban’ & ‘rural’ is politically and administratively defined by all the countries individually.

According to the FAO, the definition of a ‘rural area’ should meet the criteria’s of place of residence; land settlement pattern; and the job that residents engage in. Rural areas are generally low settled population density open areas. The rural population1 is largely dependent (directly/ indirectly) on primary production (mining, agriculture, livestock, forestry, fisheries) on high proportion of unsettled land area and/or land as their principal, if not having any other source of livelihood.

Table 1.1: Distinctive features of Rural-Urban Ambience


Urban Ambience

Rural Ambience



Self reliant



Local recycling


High-rise apartments

Low-rise houses

Daily Commuting

Long hours

Little or none


Isolated; dormitory

Close companionship

Open fields

Far away

Walking distance

Population Density




Trade, industry & Service

Mainly agriculture



Less Monetized



Poor and weak

Attitude to Modernization

More Adaptable

Less Adaptable

Family Structure



Manufacturing & Mobility of money



Table 1.2: Definition of Rural Area


Definitions of Rural Area


Census 2011

Village: Basic unit for rural areas is the revenue village, might comprise several hamlets demarcated by physical boundaries.

Urban Unit (or Town): Towns are actually rural areas but satisfy the following criteria.

  • All places with a municipality, corporation, cantonment board or notified town area committee, etc. (known as Statutory Town)

  • Minimum population >= 5,000

  • Population density >= 400/ sq. km.

  • 75% of the male population engaged in non- farm activity.

  • Term ‘rural’ is not defined. The definition does not specify the population strata.

  • Term ‘rural’ is not defined. The definition does not rule out 5,000+ population villages.


Locations with population up to 10,000 will be considered as rural and 10,000 to 1, 00,000 as semi-urban.

It does not include 10,000+ population villages and includes 5,000-10,000 population towns in rural.



Area comprising in any village irrespective of population and also in any town, the population of which does not exceed 50,000

Village and town characteristics are not defined.

Planning Commission

Towns with population up to 15,000 are considered as ‘rural’.

Town characteristics are not defined.


Locations having shops/ commercial establishments’ up to 10,000 are treated as ‘rural’.

Population criteria and other characteristics are not taken into consideration.

LG Electronics

The rural and semi-urban area is defined as all other cities other than the seven metros.

It does not define the rural areas separately.


Any area classified as per the revenue record of the state, irrespective of population. It also includes an area even if classified as town provided its population does not exceed 20,000

Characteristics of Village and town are not defined.

Although there is a common understanding of what is rural, a universal definition does not exist. It is ironic that Census of India geographically demarcates rural areas in the context of all that is not urban considering that there were only villages before the development of cities & towns. In fact, a major part of the countryside still remains steeped in a lifestyle that is rural, largely dependent on agro & allied activities in 641000 villages. Despite having most of the natural resources of the country as well as superiority in numbers, the rural sector has been deprived of the benefits of progress and the products that make everyday life easier and more comfortable.

While defining the rural areas Indian Government must consider two things; firstly, there are more than 14000 villages in the 5,000-10,000 population strata so the population cut-off criteria should definitely include these villages as rural areas and secondly, it also has to be considered that the majority of rural institutions, agro markets and rural banks are located in larger villages and towns.1 Many villages have been notified as towns due to their economic growth, but they still continue to retain their rural character.

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