India’s Economic Growth: Rural Transformation and Integration

Rural transformations imply dramatic social changes, and often radical changes in social as well as economic policies. This paper focuses on the rural transformation that occurs with the economic growth in India. The paper focuses on the forces that drive this transformation, how this transformation proceeds, and what are the potential traps and inefficiencies are that may inhibit it. We also examine the growth of infrastructure in rural areas and inclusiveness of the growth and rural transformation along with the role of rural transformation and integration in India's economic growth. The impact of the growth of an economy trickles down to the lowest level entity which may be considered as village. On the other hand growth and development of the lowest level can contribute to the overall growth of the economy through multiplier effect. The pace of trickledown from top to bottom depends on the efficient planning and implementation of the Government's schemes and programmes.

Poverty alleviation focussing rural areas has been on the national policy agenda since independence. The importance of reduction in poverty, provision of other basic needs and equitable development has been emphasised in all the five year plans since independence particularly since the 5th Five-Year Plan. Significant development has taken place in the post-reform period; India has done well in some indicators such as economic growth, exports, balance of payments, resilience to external shocks, service sector growth, significant accumulation of foreign exchange, information technology (IT) and stock market, improvements in telecommunications etc. However, exclusion continued in terms of low agriculture growth, low quality employment growth in rural areas, rural-urban divides, and regional disparities etc. Overall poverty in rural areas has declined, but still around 25 percent of rural population is living below poverty line and not been getting basic necessity of live.

Lot of social infrastructure like health, educational, rural roads, rural housing, drinking water facilities, toilets, and Anganwadi centres have been created under various Centrally Sponsored Schemes (CSS) of the Government of India. But still various rural areas of the county, especially in states like Bihar, Jharkhand, West Bengal, Chhattisgarh, Orissa etc. lack in basic facilities. Therefore, now we need to prepare area specific focussed scheme and programmes with the targeted objectives for achievements in particular sector. To consider the area specific schemes a Committee was constituted by erstwhile Planning Commission for suggesting restructuring of CSS taking into consideration of State specific needs. On the recommendation of the Committee, 10% of flexi funds under all CSS have been earmarked and being provided to the State for taking up of innovative initiatives to provide basic facilities to the rural people so that rural transformation could be expedited.