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Rural Development Notes for Class 11 Economics

Please refer to Rural Development Notes for Class 11 Economics provided below. These revision notes have been prepared to help you understand and learn all important topics given in your NCERT Book for Class 11 Economics. We have provided Notes for Class 11 Economics for all chapters provided in your textbooks. These concepts, notes, and solved questions have been prepared for Standard 11 Economics by our expert teachers t help you gain more marks in exams and class tests.

Class 11 Economics Chapter 5 Rural Development Notes

Please carefully read the Rural Development Notes for Class 11 Economics provided below. Use them prior to your exams as this will help you to revise the entire chapter easily. We have also provided MCQ Questions for Class 11 Economics which will be asked in the upcoming exams.

It is a continuous and comprehensive socio-economic process trying to improve all the aspects of rural life.
In other words, Rural development is a comprehensive term which essentially focus on action for the development of area which is lacking behind in the overall development of village economy.
The overall development of rural economy comes under rural development. Such as:-
♦ Development of human resources

♦ Development of infrastructure

♦ Land reforms

♦ Poverty Alleviation program etc

Agricultural credit

It refers to the credit for the farming. Due to involvement of long time period and uneven distribution of land, credit becomes the lifeline of Indian agriculture.

Sources of Agricultural credit

There exist 2 types of sources which provide agricultural credit in rural areas.

1. Non institutional sources

2. Institutional sources

1. Non Institutional sources

It is the most common source of rural credit.

♦ Money lenders

♦ Zamindar

♦ Sahukar

♦ Relatives

♦ Trades

Merits of taking credit from Non institutional sources

♦ No legal formalities are required

♦ Loan is provided anytime

♦ Ease in taking loan

Demerits of taking credit from Non institutional sources

♦ High rate of interest

♦ Exploitation of farmers

♦ Farmers were forced to sell their products to the lenders at low price.

2. Institutional sources

It refers to organizations which are legally meant to provide credit.

♦ Co-operative credit societies:-

They provide adequate credit to the farmers at reasonable rate of interest. They also provide directions in agricultural operations to the farmers so that they can increase their productivity.

 Commercial banks

It is an instituition which performs the functions of accepting deposit, granting loans and making investment, with the aim of earning profit.
Example:- SBI (State Bank of India), PNB (Punjab National Bank), Canara Bank etc.

The government realized that agricultural credit needs cannot be solely met by cooperative credit societies and commercial banks should play an important role.

♦ Regional rural bank (RRB)

These banks are set up to promote credit facilities in rural and backward areas of the country.
They operate at district level and focus on the credit requirements of the weaker sections of the societies.

♦ NABARD (National Bank for Agriculture and Rural Development)

It is an apex bank in agricultural and rural credit (established in 1982).

The bank has been entrusted with the matters concerning policy, planning and operations in the field of credit for agricultural and other economic activities in rural areas of the country.
The basic objective of this is to promote the strength of agricultural credit in rural areas.

 Self help groups (SHGs)

Self help groups are small groups of poor people. They help each other to solve their problems. SHGs promote small savings among their members. The savings are kept with the bank with the name of the self help groups. Later on this common fund is used to give small loans its members.
The government also provides partial financial assistance to SHGs

Agriculture marketing-

Indian farmers always faces the problem of selling their products in the market at the right price. The basic deficit they face is the problem to market their products, and hence the requirement of agriculture marketing arises. Agriculture marketing is a process that includes assembling, storage, processing transportation, packaging, grading and distribution of different agriculture commodities across the country.
In other words, it includes the services involved in moving the agricultural products from farm to the ultimate consumer.
A good marketing system is essential to mobilize the surplus agricultural products (food grains and raw materials) to feed urban populations and industries.

Defects of agriculture marketing

♦ Lack of storage facility

 Lack of effective transportation in rural areas

 Lack of marketing information in farmers

 Lack of adequate finance

 Inadequate communication

Measures taken for agriculture marketing

♦ Regulated market-

It is a type of market which eas established by the government of India for transparency in buying and selling of agriculture commodities. The buying and selling of commodities under this market is monitered by the committee which includes the representatives of government, farmers and traders. It is established just for protecting farmers from fraud by middleman and to provide them adequate price for their commodities.

 Co-operative agriculture marketing societies

It refers to the type of marketing societies are formed by the farmers to sell the output collectively and to take advantage of collective bargainging in order to get better price for the crops.

 Minimum support price (MSP)

In order to give better price and to increase the incentive for producing agriculture products the government of India gives minimum support price to the farmers for their crops. It can be treated as the offer price by the government to the farmers for their crops. The government purchases the products from the farmers at Minimum Support Price and stores it in the godowns of Food Corporatio of India (FCI).

 Subsidised transport

In order to promote and strengthen agriculture in the economy, the government introduced subsidized transport system for the farmers. Railway offer low rate transport to the farmers for bringing their produce to the urban markets where they may get a better deal.

 Public distribution system

Concept of ration shops and fair price shops operates the public distribution system in the economy. Fair price shops offer essential commodities like rice, wheat, pulses, kerosene erc, at a lower price to the financially lower sections (below poverty line) of the societies.

 Standardization and grading

Grading is the process of dividing the products into different lots which have similar characteristics in shape, size, type, quality, performance etc. Products of different qualities should be separated into groups and similar quality products are put into a Grading and quality helps the farmers to secure more price for better quality of products and to earm more. Example- different grades of rice are Basmati, Arborio, Brown, Jasmine, White etc.

Diversification of Agricultural activities

Due to huge amount of rise and sole dependence of rural areas on agriculture there exist a need to diversify the agricultural activities.
Diversification refers to the shift from crop farming to other areas of production for employment; It raises the level of income and reduces the heavy rise. Finding livelihood away from crop farming becomes more important when it is realizes that crop farming sector is overburdened.
It has 2 aspects:-

1. Diversification of crop production

It refers to changing the single cropping system into multi-cropping system. Earlier a single food grain is produced on a piece of land; the basic agenda of diversifying this is to change the cropping pattern from food grains to cash crops.
Multi-cropping refers to production of more than 1 crop in a year.

It decreases the dependence of farmers on one or 2 crops as they are now engaged in production of variety of crops.

2. Diversification of productive activities

Due to overburden of crop farming sector, major portion of the increasing workforce were given employment opportunities in non farming sectors.
Non-farming primary sector includes

 Animal husbandry (includes breeding, caring and rearing of farm animals, like cattle’s, goats, duck etc).

 Fisheries (includes catching, processing and selling of water animals).

 Horticulture (includes cultivation of fruits, vegetables, flowers, medicinal plants etc). (the revolution connected to horticulture is known as golden revolution).

Sustainable development and organic farming

The development of our present generation without hampering the development of future generation is known as Sustainable Development.

Organic farming

It is a process of producing food naturally; under such farming the use of chemical fertilizers and highly yielding variety of seeds is totally prohibited.
It is an eco-friendly method of cultivation which brings Sustainable development in the country.

In other words, it a type of farming system in which the total farming restores, maintain and enhance the balance of ecological system.
This method of farming is very popular across the globe, many countries produces around 10% of their food output through organic farming.

Benefits of organic farming

 Eco-friendly system of production.

(Due to non involvement of fertilizers)

 It is a less expensive method because of use of traditional technique of production.

 Increases the level of income, as the demand for organic products is increasing rapidly in international market.

 It provides healthier and tastier food.

 Provides more employment opportunities as it is labour intensive.

♦ Labour intensive technique

It refers to the technique which requires large amount of labour to produce the goods.

♦ Labour force

It refers to the actual number of people available for work.


♦ Development of human resources

♦ Development of infrastructure

♦ Land reforms

♦ Poverty Alleviation program etc.

♦ Agricultural credit

♦ Sources of Agricultural credit

♦ Non institutional sources

♦ Institutional sources

♦ Agriculture marketing

♦ Defects of agriculture marketing

♦ Lack of storage facility

♦ Lack of effective transportation in rural areas

♦ Lack of marketing information in farmers

♦ Lack of adequate finance

♦ Inadequate communication

♦ Measures taken for agriculture marketing

♦ Regulated market

♦ Co-operative agriculture marketing societies

♦ Minimum support price (MSP)

♦ Subsidised transport

♦ Public distribution system

♦ Standardization and grading

♦ Diversification of Agricultural activities

♦ Sustainable development

Rural Development Notes for Class 11 Economics

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