Managing Transformation of Rural India through Rural Non-Farm Economy

Over the last three decades, economy has undergone a structural transformation as the share of rural non-farm sector (RNFS) is increasing in a country like India where 68% of people live in rural areas contributing 56% of Indias income, 64% of expenditure, and 33% of savings. A significant proportion of salaried (39%) and non-agricultural self-employed households (46%) are located in rural areas. RNFS also provides forward and backward linkage to the urban economy by way of supplying agricultural produces, food, vegetables, dairy products and semi-skilled & skilled manpower. Despite various policies, programmes, schemes, and strategies for rural development since the initiation of planned approach in 1951, rural India is still deprived of the socio-economic well-being as revealed by the latest Social, Economic and Caste Census, 2011 (SECC) and other studies. The factors responsible for the growth of Rural Non-Farm Economy (RNFE) are, lower productivity of farms, sluggish growth rate of agriculture, shrinking farm size, increasing cultivation cost, rapid pace of urbanization, squeezing boundaries of rural-urban divide, increased wage rates in non-farm sector, accelerated pace of rural non-farm employment, and spiraling share of non-farm GDP. The present paper is a review paper attempting to examine and analyze the present status of Rural Non-Farm Economy (RNFE) and propose the strategies for managing this transformation for achieving rural inclusive development.