Relevance: mains: G.S paper III: Indian Economy
What is Rural Non – Farm sector?
- Rural-Non-Farm-Sector (RNFS) includes all economic activities viz., household and non-household manufacturing, handicrafts, processing, repairs, construction, mining and quarrying, transport, trade, communication, community and personal services etc. in rural areas.
What are the GOI interventions for the promotion of this sector?
- Pradhan Mantri Mudra Yojana (PMMY) is a scheme to extend collateral free loans by Banks, Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs) to small/micro business enterprises in the nonagricultural sector to individuals to enable them to setup or expand their business activities.
- The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005‟ which provides at least one hundred days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work”.
- The demand for work itself is influenced by various factors such as rain-fall pattern, availability of alternative and remunerative employment opportunities outside MGNREGA and prevailing unskilled wage rates.
- Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) – The Ministry of Rural Development implements DDU-GKY to drive this national agenda for inclusive growth, by developing skills and productive capacity of the rural youth from poor families.
- There are several challenges preventing India’s rural poor from competing in the modern market, such as the lack of formal education and marketable skills. · DDU-GKY bridges this gap by funding training projects benchmarked to global standards, with an emphasis on placement, retention, career progression and foreign placement.
- Deendayal Antodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) is a flagship programme of the Ministry of Rural Development (MoRD) that seeks to alleviate rural poverty through building sustainable community institutions of the poor.
- The centrally sponsored programme is implemented in partnership with the State governments.
- Aajeevika Grameen Express Yojana (AGEY) – The Self Help Groups under DAY-NRLM will operate road transport service in backward areas.
This will help to provide safe, affordable and community monitored rural transport services to connect remote villages with key services and amenities (such as access to markets, education and health) for the overall economic development of backward rural areas.
- This will also provide an additional avenue of livelihood for SHGs.
What are the challenges in the RNFS?
- Infrastructure – The most significant bottleneck in generating higher levels of rural nonfarm activity in India is the quantity, quality and reliability of infrastructure.
- Quality of manpower – High levels of illiteracy in rural India have hampered the growth of the rural nonfarm sector.
- Education has both intrinsic and instrumental value.
- Apart from having a positive correlation with wages, a minimum basic standard of education is necessary to apply for credit, to be aware of one’s rights and responsibilities and to deal with instances of corruption and malpractice.
- Forward and backward linkages – Absence of appropriate forward and backward integration greatly affects performance of nonfarm activities in rural areas.
- Forward linkages of the RNF sector serve as inputs to other sectors.
Also, in backward linkages the RNF sector demands the outputs of other sectors.
- Empirical studies indicate that forward linkages from RNF activities to agriculture (rurally produced agricultural inputs) are particularly important where traditional agricultural technologies are utilized, while in case of backward linkages between
RNF activities and agriculture, especially the linkages between rural agricultural processing and the agriculture sector and between rural transport and rural marketing activities are quite significant for rural economic development.
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