Hardly 23 per cent of the average income of all rural households in India comes from agriculture and animal husbandry activity, reveals a nationwide financial inclusion survey by NABARD. Moreover, even among so-called agricultural households — those with at least one member engaged in farming and whose produce is annually worth Rs 5,000 or more — just over 43 per cent of income on an average comes from cultivation and livestock rearing. These findings confirm a trend that has been obvious since the start of this century: Rural India can no longer be viewed solely through the prism of farming. Even more misplaced is the impression of a widening Bharat-India divide conveyed by agriculture contributing “only” about 17 per cent of the country’s GDP at current prices, despite two-thirds of its population living in rural areas. If just 47.6 per cent of rural households are “agricultural”, as per the NABARD survey, and 43.1 per cent of even their incomes are from farms, the gap isn’t as yawning as made out.
The crisis in rural areas today is actually one of too much agriculture — in terms of both relative output and employment. What is needed is more manufacturing units, including those that process and add value to agricultural produce. China’s industrialisation in the late-Seventies and Eighties was driven by Township and Village Enterprises. There is ample scope to replicate that experience in India and extend it to services such as business process outsourcing or even software development. We do have stories of success — in the rural-based manufacturing clusters of Tamil Nadu and Gujarat, for instance — but they are far too isolated. With 24×7 electricity, all-weather roads, broadband connectivity and investment in education — which is what the government should focus on — we can expect an unleashing of rural entrepreneurship. That will help generate better quality non-farm employment than is now available in brick kilns, stone quarries, farm implement repair, construction and other such informal sector enterprises.
What will happen if more rural jobs are created outside of agriculture? Well, the beneficiary, ironically, would be the farm sector. As people are weaned off the land, the ones remaining, and truly interested in agriculture, will be induced to invest in its productivity. Farming will, then, cease to be a default occupation and the agriculture sector would gain from the processes of specialisation and division of labour that Adam Smith famously described in The Wealth of Nations. That is the route ahead — both for “Bharat” and for “krishi”.