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Title: Contribution%20of%20Rural%20Economy%20In%20Nation%20Development


1
Contribution of Rural EconomyInNation
Development

  • Abhinav Singh-03

  • Sanchita Roy-38
  • Rural Production And Livelihood System

2
Insights into the rural economy
  • Rural India -2/3rd of country's billion
    population, living in 638,365 villages and earn
    one-third of the national income.
  • Rural economy is composed of many economic
    activities which can be broadly classified into
    Farm and Non-farm sector.
  • Agriculture
  • Allied sectors like livestock, forest, fishing,
    poultry
  • Village/rural industries.

3
Content
  • Agriculture and its allied sector.
  • Allied sector- Livestock Dairy, Poultry,
    Fishing Forestry.
  • Non farm sector comprising of Small scale
    industries.
  • Rural consumer from the perspective of FMCG
    Durable goods industries.

4
Role of Agriculture and allied sector in the
development of the nation
  • India is primarily an agrarian society with two
    third of its population living in rural areas.
  • Contribution to GDP - 55 in 1947
  • - 22 in
    2005
  • Provides employment to about 65 of the total
    population.
  • With a share of 2.7 of the world agricultural
    production, India is ranked sixth in the world.

5
Food Production in India (MT)
Crop 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 2001-02
Rice 77.0 81.7 82.5 86.0 89.7 84.9 93.1
Wheat 62.1 69.4 66.3 70.8 76.4 68.8 71.8
Coarse Cereals 29.0 34.1 30.4 31.5 30.3 31.6 33.9
Pulses 12.3 14.2 13.0 14.8 13.5 10.7 13.2
Food grains 180.4 199.4 192.3 203.0 209.8 196.0 212.0
6
Contd.
  • India is among the top five producers in the
    world of rice, wheat, groundnuts, coffee,
    tobacco, spices, sugar, tea, jute, cotton,
    oilseeds, fruits and vegetables.
  • Relationship between agricultural income and
    economic growth is almost direct.

7
Fertilizer industry
  • 3rd largest fertilizer producer in the world
  • Presently, there are 57 large sized fertilizer
    plants in the country .
  • Total nutrient consumption in 2003-04 stood at
    16.901 MT.
  • By 2025 People 1.4 billion
  • Food grain requirement 300 Mt
  • Fertilizer requirement45 Mt

8
Consumption of fertilizer in nutrient terms (0000 tonnes of nutrients) Consumption of fertilizer in nutrient terms (0000 tonnes of nutrients) Consumption of fertilizer in nutrient terms (0000 tonnes of nutrients) Consumption of fertilizer in nutrient terms (0000 tonnes of nutrients) Consumption of fertilizer in nutrient terms (0000 tonnes of nutrients) Consumption of fertilizer in nutrient terms (0000 tonnes of nutrients)
Fertilizers 1997-98 1998-99 1999-2000 2000-01 2001-02
Nitrogenous Fertilizer 10,901 11,354 11,592 10,920 11,310
Phosphatic Fetrtilizers 3,914 4,112 4,799 4,215 4,382
Potassic Fertilizers 1,373 1,332 1,678 1,567 1,667
All Fertilizers (NPK) 16,188 16,798 18,069 16,702 17,360
Percentage increase 13.14 3.77 7.57 -7.56 3.90
Source Ministry of Chemical Fertilizer Source Ministry of Chemical Fertilizer Source Ministry of Chemical Fertilizer Source Ministry of Chemical Fertilizer Source Ministry of Chemical Fertilizer Source Ministry of Chemical Fertilizer
9
Seed Industry
  • Seed production-0.18 million quintals in 1953-54
  • 5.3 million quintals
    in 1992-92
  • 9.3 million quintals
    in 2002-03
  • Indian seeds market is one of the biggest in the
    world, turnover of around Rs 25 billion (2004).
  • Market is expected to grow Rs 235 billion by 2010.

10
Pesticide industry
  • Indias pesticide industry Largest in Asia,
    12th largest in world with value of US 0.6
    billion.
  • India produces 90,000 metric tones of pesticides
    a year.
  • Per hectare consumption of pesticides in India is
    very low at 0.55 Kilograms when compared to
    developed countries.
  • Pesticide consumption in India has grown to a
    total market size of over Rs. 45000 million in
    the year 2004.

11
Allied Sectors
  • Livestock sector
  • Contribution from Indian Livestock sector to the
    GDP of the country was about 40.6 of total
    contribution from Agriculture and allied sector.
  • Total value of output was estimated at about US
    35 million.
  • Plays an important role in the socio- economic
    life of India
  • It is a rich source of high quality foods such as
    milk and meat and a source for income and
    employment to millions of rural farmers,
    particularly women.

12
Dairy/Milk production
  • India is the top-most milk producing country in
    the world.
  • 86.8 million tons of annual milk production from
    animals managed by nearly 70 million farmers
  • Revolution brought by - Operation flood
  • The share of organized sector is small
    (private-11-12, Government/cooperative sector -
    11-12).
  • There is still a very large portion of milk
    market in the hands of unorganized sector which
    has adverse effect on the price of the milk.

13
Production an per capita availability of milk Production an per capita availability of milk Production an per capita availability of milk
Year Milk production (million tonnes) Per capita availability (gms  / day)
1950-51 17.0 124
1960-61 20.0 124
1970-71 22.0 112
1980-81 31.6 128
1990-91 53.9 176
2000-01 81.4 223
2001-02 84.6 226
  Provisional               AnticipatedSource Department of Animal Husbandry   Provisional               AnticipatedSource Department of Animal Husbandry   Provisional               AnticipatedSource Department of Animal Husbandry
14
Poultry Production
  • India is the fifth worlds largest egg producing
    country.
  • Annual growth rate is 8-10 in egg and 12-15 in
    the broiler industry.
  • Poultry provides employment to about 1.5 million
    people.
  • Consumer market -250 million which is likely to
    go up to 350 million by year 2010.
  • Partially vertical integration - infrastructure
    for meat processing, packaging, preservation and
    marketing with value addition of products and
    maintaining a cold chain till the product reaches
    the consumer.

15
Fisheries Production
  • India has a coast line of about 8041 km.
  • India's total annual fish production is about
    5.65 million tons (Inland - 2.82 million tons and
    marine - 2.83 million tons (2004).
  • The estimated potential for production is about
    8.4 million tons (Inland 4.50 and marine 3.90
    million tons).
  • Export of marine products from India at present
    is about 1.3 billion. Indian marine products
    are exported to over 64 countries.

16
Production and export of fish and marine products Production and export of fish and marine products Production and export of fish and marine products Production and export of fish and marine products Production and export of fish and marine products Production and export of fish and marine products
Year Fish production (million tonnes) Fish production (million tonnes) Fish production (million tonnes) Export of marine products Export of marine products
Year Marine Inland Total Quantity  ('000 tonnes) Value (Rs crore)
1950-51 0.5 0.2 0.7 20 2
1960-61 0.9 0.3 1.2 20 4
1970-71 1.1 0.7 1.8 40 35
1980-81 1.5 0.9 2.4 80 235
1990-91 2.3 1.5 3.8 140 873
2000-01 2.8 2.8 5.6 503 6,296
2001-02 2.9 3.1 6.0 458 5,815
  ProvisionalSource Department of Animal Husbandry Dairy.   ProvisionalSource Department of Animal Husbandry Dairy.   ProvisionalSource Department of Animal Husbandry Dairy.   ProvisionalSource Department of Animal Husbandry Dairy.   ProvisionalSource Department of Animal Husbandry Dairy.   ProvisionalSource Department of Animal Husbandry Dairy.
17
Role of Forest Resources in National Economy
  • Forest is of paramount importance for
    socio-economic development of the rural areas.
  • Important source of fuel and also of raw
    materials, such as, timber, bamboos, fodder,
    fruits, gums, resins, dyes, mushrooms, medicinal
    plants and many other non-wood forest products
    (NWFP).
  • Over the years, many NWFP have become important
    sources of income and employment in rural areas
  • Besides supplying timber and fuel, the forests
    are an important source of raw materials for the
    matchwood, plywood and paper industries and also
    potentially for the rayon industry .

18
Food Processing
  • India is the among the largest producer of fruits
    and vegetables in the world.
  • Food processing covers a spectrum of products
    from sub-sector comprising agriculture,
    horticulture, plantation, animal husbandry and
    fisheries
  • The processed food industry ranks fifth in size
    in the country, representing 6.3 per cent of GDP.
  • Accounts for 13 per cent of the country's exports
    and 6 per cent of total industrial investment.
    The industry size is estimated at US 70 billion,
    including US 22 billion of value added products.
  • Its processing level is estimated to be around 2
    , as compared to about 80 in Malaysia, 30 in
    Thailand

19
Non Farm sector Transforming Rural India
  • While agriculture dominates the rural scene, it
    is not the only economic activity there.
  • Rural areas have had some manufacturing
    activities too - handloom weaving, oil pressing,
    bidi manufacturing
  • Rural Non farm sector (RNFS) is an important one
    in terms of understanding the livelihood patterns
    of vast sections of the population.
  • Rural Non Farm Sector (RNFS) holds the key to
    faster economic development of the country

20
Small Scale Industries
  • Small-scale industry (SSI) is any unit with an
    upper limit on investment (in plant and
    machinery) of from Rs. 0.20 million to Rs. 0.35
    million.
  • Village and small industries comprises of
    Handloom, Handicrafts, Coir, Sericulture, Khadi
    and Power looms
  • VSI comprises of both traditional and modern
    group of Industries
  • Generates revenue of almost Rs. 6000 crores and
    provides employment to about 50 million people
  • Farmers can supplement their income and provide
    themselves with a better source of livelihood
    through these VSI.

21
Performance of Small Scale Industries
22
Forest-based small-scale manufacturing
  • Forest based industries collection of forest
    plants and herbs for aromatic and medicinal
    purpose, cane and bamboo processing gums and
    resins katha manufacturing.
  • These forest based industries utilize minor
    forest produce which are under the control of
    State Forest Departments.
  • Also provides raw material to industries like
    Timber, match industry.

23
Cluster Development A way towards Nations
development
  • With a contribution of 40 to the country's
    industrial output and 35 to direct exports, the
    Small-Scale Industry (SSI) sector has achieved
    significant milestones for the industrial
    development of India.
  • Indian SSI clusters share significant constraints
    like technological obsolescence, relatively poor
    product quality, information deficiencies, poor
    market linkages and inadequate management systems
    .

24
Rural consumers and unexplored rural market
  • Average rural income in 1994-1995 -------55-58
  • 2004-2005--------63-64
  • Number of middle and high income households in
    rural India expected to grow from 80 million to
    111 million by 2007.
  • In urban India expected to grow from 46 million
    to 59 million by 2007
  • Increased income in farm sector impacts the
    entire economy however it has an almost
    immediate impact on some sectors like consumer
    durables and non-durables, tractors and
    motorcycles

25
Fast Moving Consumer Goods (FMCG) Sector
  • Sector is expected to witness more than 50 per
    cent growth in rural and semi-urban India by
    2010.
  • Rural market for FMCG is worth 14.4 billion
  • The total numbers of rural households are
    expected to rise from 135 million in 2001-02 to
    153 million in 2009-10.
  • This presents the largest potential market in the
    world.
  • With 12.2 of the world population living in the
    villages of India, the Indian rural market is a
    market that no one can afford to overlook.

26
Durable Goods
  • Rural areas witnessed rapid market growth driven
    largely by agricultural growth, income
    redistribution, and inroads made by audio-visual
    media
  • The rural share of the market for durable goods
    has grown steadily over the last few years, from
    54.2 percent to 57.9 percent in 2004, and in
    items such as bicycles, mechanical wrist watches,
    radio/ transistors etc. the share of the rural
    market was in excess of 75 percent

27
Government Initiative for Holistic Rural
Development
28
  • Conclusion
  • Winds of Growth from Rural India
  • Indias rural economy is vital for growth.
  • However the biggest problem is that of finance.
  • Microfinance models should be established in a
    systematic way.
  • Thrust must be provided to the rural industries

29
Thank You
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