A new rural economy

A new rural economy

Are there some subterra-nean changes in rural India that get ignored in the wider debate on farmer distress? The provisional results of the economic census that was conducted in 2005 were released on Wednesday.

They suggest that there is a gradual increase in non-farm activity in our villages. Take two facts. First, the average annual increase in the number of rural enterprises since 1998 was 5.53%.

New urban enterprises cropped up at a slower pace of 3.71%. Second, since 1998, average annual employment growth in rural India was 3.33%, compared with 1.68% in the cities.

What does this mean? It is very possible that villagers are investing a part of their small surpluses in non-farm enterprises. If this is indeed the case, then what we are seeing are the first signs of an overdue diversification of the rural economy. The new units are offering employment opportunities to young villagers.

Farming still dominates, but watch this trend as well.