Indian Economy:An Imperative Need for Special Focus on Rural Economy

Performance of Indian economy when compared across different countries, in the recent years has appreciation from all over. Macroeconomic indicators are showing impressive growth in spite of the pressure from global economic slowdown since 2008. And this is believed as the result of new economic policy, and economic reform measures taken since 1991. It is true that Indian economic policy has taken a turn, and the structure of the economy changed from mixed economy to a liberalised private, market economy opening up to the global economy more freely. Internal and external factors have taken the advantages of this and grabbed the opportunities, started to compete and many participants in the economy became strong and gained from it. Sectors and sub sectors of the economy transformed, reformed, expanded and new activities emerged with economies of the scale. However, few traditional sectors of the Indian economy are still finding it difficult to adjust to the new competitive market environment. Specifically, Agriculture and in general rural economy is one such sector which in fact could not grow stronger enough to be in the competitive environment instead weakened because of the declined support from either government or from market. Rural economy finds difficult to cope with the changing market environment is mainly due to the social-cultural features of the large population engaged in the rural economy and the kind of unfavourable urban-rural linkages and partly due to political reasons. Prospective Indian economy should realise the importance of rural economy and 'market failure' components of it needs government support and encouragement in a sustained, nonpolitical manner. Highlighting this, an attempt is made in this paper to organise discussion on importance of rural economy and issues and problems related to it.