IRJARD2, International Research Journal of Agriculture and Rural Devt

International Research Journal of Agriculture and Rural Development
Vol2. No 1.June 2013, e ISSN: 2319 – 331X
International Research Journal of Agriculture and Rural Development - IRJARD

ISSN No. 2319 – 331X
Published by Non Olympic Times

ISSN No. 2319 – 331X
Vol.2.No.1. June’2013
IRJARD/Vol.2.No.1/NOT
1
Performance of Self Help Groups under Micro-finance Programme

in Kashmir Valley- A Case Study of Block Kulgam
Rashid Rasheed Wania and Dr. Imtiyaz-ul-Haqb

a.
Research Scholar, Department of Economics, University of Kashmir, Srinagar
Address: Damhal Hanji Pora, Tehsil Damhal Hanji Pora, District Kulgam, Post code
192233 J&K, India
b.
Assistant Professor(Senior Scale) Department of Economics, University of Kashmir, Srinagar.
Address: Department of Economics, University of Kashmir, Hazartbal, Srinagar
Post Code 190006, J&K, India
ABSTRACT: Micro- finance plays the role of a catalyst in livelihood generation and enhanced
income for the low- income households. Micro- financing can have a positive part to play in
combating poverty and bolstering an entrepreneurial spirit that can have real lasting positive
effects. According to Asian Development Bank, micro-finance is the provision of a broad range
of services such as deposits, loans, payment services, money transfers, and insurance to poor
and low- income households and micro-enterprises. Swarnajayanti Gram Swarozgar Yojana
(SGSY) is the one of such micro-financing scheme of the government. The present study attempts
to find out the performance of Self Help Groups ( SHGs) financed by different commercial banks,
under micro finance scheme, in block Kulgam under the programme of Swarnajayanti Gram
Swarozgar Yojana (S.G.S.Y). For the purpose of measuring and ranking the performance of the

group, a maturity index was developed with 20 key performance indicators. For each indicator,
values (marks) were assigned as per the actual performance of the group. The maximum values
allotted to each of the indicator aggregates to 100. The performance of the SHGs is assessed on
the basis of the total marks obtained on 20 indicators. It was found that the sample SHGs
performed satisfactorily on twenty performance indicators and they scored around 56marks out
of a maximum of 100 marks.
Key Words; Swaranjayanti Gram Swarozgar Yojana; Self Help Groups; Micro-finance
INTRODUCTION:
The origin of micro finance could be traced back to beginning of cooperative movement in
Germany, where the movement was started in 1944 in the field of cooperative based credit
system by Raiffeisen societies as well as Rochdale pioneers in England. Similarly, the enactment
of cooperative credit society Act, 1904 could be considered the beginning of micro finance in
India. Micro-finance is emerging as integral part of the new development paradigm through
participation and development. Micro- finance has been defined by the Task Force on Micro-
finance constituted by the National Bank for Agriculture and Rural Development (NABARD) as
―provision of thrift, credit and other financial services and products of very small amounts to the
poor to enable them to raise their income and improve their living standards.‖ Micro-finance
programs offer savings and credit opportunities to rural poor populations not otherwise served by
2
formal institutions. Micro-finance programs provide poor people with small loans as well as
jointly liable self-selected groups. Provision of micro finance services is meant to help the poor
develop their micro-enterprises and sustainable livelihoods.
Swarnajayanti Gram Swarozgar Yojana (SGSY) is one of such micro-finance programme.

The main objective of SGSY is to bring the assisted poor families above poverty line by
ensuring appreciable sustained level of income over a period of time. This objective is to be
achieved by, inter-alias, organizing the rural poor into self help groups through the process of
social mobilization, their training and capacity building and provision of financial assistance in
income- generating activities. The formation stage of SHGs generally takes six months. It is
necessary to subject each SHG to test whether it has evolved into good group and ready to get
into the next stage of evolution. This is done through a grading exercise to identify the
weaknesses ,if any, and help the group to overcome the same. Grading of the group should
enable the District Rural Development Agencies to establish linkages for the good groups with
banks. Grading exercises are to be taken every quarter till such time that all groups obtain a good
grade. The first grading has to be done after six months of the formation of SHG to ensure bank
linkage of successful groups and making revolving fund available to them .The groups are
ranked as successful on the basis of the parameters such as size of SHG‘s, saving capacity,
meetings and attendance, tendency of loan seeking and repayment, and record maintenance. A
self-help group generally consists of ten to twenty members. Generally all members of the group
should belong to families below the poverty. However, if necessary, a maximum of 20 per cent,
and in exceptional cases where essentially required, up to a maximum of 30 per cent of the
members in a group may be from families marginally above poverty line, living continuously
with below poverty line families and if they are acceptable to below poverty line members of the

group. The above poverty line members of group are not eligible for subsidy under the scheme
and shall not become office bearers (group leader, assistant group leader or treasurer) of the
group. The funds for the scheme are being provided by the centre and state government in the
ratio of 75:25. The subsidy allowed under SGSY is 30 per cent of the total project cost to a
ceiling of Rs 7500. In respect of SC/STs and disabled persons. However, this will be 50 per cent
of the project cost to a maximum of Rs 10,000 respectively. For groups of Swarozgaries (
SHGs), the subsidy would be at 50 per cent of the project, subject to a ceiling of Rs 1.25 lakhs or
per capita of Rs 10,000, whichever is less. The SGSY has special focus on the vulnerable groups
among the rural people. Accordingly the Scheduled Caste/ Scheduled Tribe account for at least
50 per cent, women 40 per cent and disabled 3 per cent of those assisted.
In Kashmir Valley during1999-2011, a total number of 6183 SHGs were formed, out of which
4148 were Women Self Help Groups. Majority of these SHGs were formed in the initial years of
the implementation of SGSY, and the number of groups formed declined over the period of time.
Objective of the Study

To study the performance of Self Help Groups under Micro-finance Programme
Data and Methodology

In the first stage, details of all 66 Self Help Groups of block Kulgam were obtained, thereafter
SHGs were categorized village wise. A sample of 30 per cent SHGs on random basis was chosen
from each village so as to give a proportional representation to all the villages. In this way 20
3
SHGs constitute our final sample for investigation. The data related to this scheme has been
collected from field with the help of well designed and structured questionnaires. For the purpose
of measuring and ranking the performance of the group, a maturity index was developed with 20
key indicators. Values (marks) were assigned as per the actual performance of the group. The
maximum values allotted to each of the indicator aggregates to 100. The performance of SHG
was assessed on the basis of total marks obtained on 20 indicators. The list of indicators that was
taken to assess the performance of SHGs under the study is given below.
1. Meeting frequency. 2. Regularity of meetings. 3. Democratic character of the group. 4.
Sanction against deviant group. 5. Homogeneity of the group .6. Book Keeping. 7.
Maintenance of registers. 8. Members‘ saving. 9. Members access to SHG records 10.
Participation of members in decision making. 11. Internal lending. 12. Loan repayment. 13. Loan
size. 14. Support by professional agencies. 15. Credit plus activities. 16. Social and political
participation 17. Member of federation. 18. SHG Audit. 19. Members‘ saving .20. Corpus fund.
The maturity index has further been sub divided into four groups, each group comprising 5
indicators.
1. RESULTS AND DISCUSSION
1.1 Performance of 20 SHGs on indicators 1 to 5

Table-1 and Fig-1 contains information sought from 20 randomly chosen SHGs on the
indicators 1 to 5, including frequency of the meetings, regularity of the meetings, democratic
character of the group, sanction against deviant behavior, homogeneity of the group. The main
finding are:

Important findings
1. Frequency of the meetings: It was found that majority of the groups i.e 75 per cent used to
conduct monthly meetings and rest 25 per cent conducted weekly meetings.
2. Regularity of the meetings: According to provision of the scheme, the SHGs are required to
conduct 2 meetings in a month throughout the year. It was observed that all the SHGs were able
to conduct the meetings falling between 25 per cent to 74 per cent.
3. Democratic nature of the group: It pertains to the democratic election of leaders, periodic
changes of leadership, free and fair participation of members in meetings. It was observed that
all sample SHGs had 100 per cent democratic character and enforced disciplinary actions against
their deviant members.
4. Sanction against the deviant behaviour: SHGs have certain rules and regulations to
discharge their business obligations. In case any member shows a willful deviation from his
normal duties and does not honor the rules, he can be penalized for the same by invoking the
specific provisions. During our study it was found that all the 20 SHGs functioned on certain
rules and could also enforce them against the deviant members.
5. Homogeneity of the groups: Homogeneity of the group is studied on the basis of socio-
economic characteristics, such as occupations, caste, ethnicity, and income levels. It was found
that all SHGs qualified under the indicator of partial homogeneity in the case study area.
Result:-In all the above 5 indicators, the sample SHGs scored 21.75 marks out of 30
4
Table-1; Maturity Index

Performance of 20 SHGs on indicators 1 to 5
S.n Indicator Category Marks Frequenc Percentag Marks
o Assigne y e Awarded
d
1 Frequency Weekly 5 5 25 1.25
of Meetings Fortnightly 3 0 0 0
Monthly 2 15 75 1.50
Total 5 20 100 2.75
2 Regularity < 24 per cent of 0 0 0 0
of meetings the Scheduled
meetings
25 per cent to 74 10 20 100 10
per cent of the
scheduled
meetings
> 75 per cent 15 0 0 0
scheduled
meetings
Total 15 20 100 10
3 Democratic Democratic 6 20 100 6
Character of Undemocratic 0 0 0 0

the Group Total 6 20 100 6
4 Sanction Groups having 2 20 100 2
against rules and also
deviant enforced
behavior No such rules 0 0 0 0
Total 2 20 100 2
5 Homogeneit Homogeneous 2 0 0 0
y of the Partial 1 20 100 1
group Not homogeneous 0 0 0 0
Total 2 20 100 1
Source; Field Survey
5
20
15
10
5 Marks Assigned
0
Marks Awarded
Fig 1
1.2 Performance on indicators 6 to10
Table-2 and Fig-2 contains the information of Sample SHGs on indicators 6 to 10, including
book keeping, maintenance of registers, members‘ savings, members‘ access to the SHGs
records, Participation of members in meetings.
Important findings
1. Book keeping and maintenance of registers: It was found that 75 per cent of the groups
possessed 2-1 registers only, 25 per cent possessed 5 to 3 registers while as no group possessed
6 or more than 6 registers. Maintenance/updating of the registers was found good in the
respective groups.

2. Members saving and access to SHGs records: All the members were found regularly saving
in the group. ―Saving first- Credit later‖ concept prevailed in most of the groups. It was also
observed that access to SHGs records by the members was very good in the study area.
3. Participation of members in meetings: All members of SHGs participate in scheduled
meetings.
Result: In all the above 5 indicators, the sample SHGs scored 14.75 marks out of 20 marks.
7
6
5
4
3
2
1 Marks Assigned
0
Marks Awarded
Fig2
6

S.no Indicator Category Marks Frequency Percentage Marks
assigned awarded
6 Book Keeping >6 Registers 4 0 0 0
5-3 Registers 3 5 25 0.75
2-1 Registers 2 15 75 1.50
Total 4 20 100 2.25
7 Maintenance of More than 6 6 0 0 1`
registers registers are
updated
5-3 registers 4 5 25 1.0
are updated
1-2 registers 2 15 75 1.5
are updated
No registers 0 0 0 0
are updated
Total 6 20 100 2.5
8 Members’ Regular 4 20 100 4
Savings Some 2 0 0 0
members

regular
All are not 0 0 0 0
regular
Total 4 20 100 4
9 Members’ access Have Access 2 20 100 2
to the SHGs No Access 0 0 0 0
records Total 2 20 100 2
10 Participation of Majority 4 20 100 4
members in participate
meetings
Few 2 0 0 0
participate
No 0 0 0 0
participation
Total 4 20 100 4

Table-3 and Fig 3 presents information of the sample SHGs on indicators 11 to 15, including
internal lending, loan repayment, loan size, Support by professional agencies, Involvement in
credit activities.
7
Important findings:
1. Internal lending and loan repayment. Members in majority of the SHGs i.e. 60 per cent
took more than 3 times loan from their internal fund and repayment of the loan was made as per
schedule by the members of only 35 percent SHGs, while as members of 65 per cent SHGs made
irregular repayments. However no member in any group was found a complete defaulter.
2. Loan size. It was found that the credit availed by the groups from the banks had not increased
over the years.
3. Support by professional agencies. During our field study it was found that all the sample
SHGs were not supported by the professional organization on various issues.
4. Involvement in the credit plus activities. The performance of the groups in credit plus
activities was not encouraging as no group was found active in this respect.
12
10
8
6
4
2 Marks assigned
0
Marks awarded

Fig3
8
Table 3: Maturity Index

Source: Field Survey

S.No Indicator Category Marks Frequency Percentage Marks
Assigned Awarded
11 Internal No internal 0 0 0 0
Lending lending
One time 4 0 0 0
Two time 8 8 40 3.20
Three times 10 12 60 6
and above
Total 10 20 100 9.20
12 Loan As per 8 7 35 2.80
repayment installment
Irregular 2 13 65 1.30
repayment
No 0 0 0 0
repayment
Total 8 20 100 4.10
13 Loan Size Loan size 4 0 0 0

has
increased
Loan size 0 20 100 0
has not
increased
Total 4 20 100 0
14 Support by Supported 4 0 0 0
professional Not 0 20 100 0
agencies supported
Total 4 20 100 0
15 Credit plus Involved in 2 0 0 0
activities Credit plus
activities
Not involved 0 20 100 0
in credit
plus
activities
Total 2 20 100 0
9
Table-4 and fig-4-contains information of the sample SHGs on indicators 16 to 20, including
Social and political participation of members, Members of federation, SHGs audit, Members
training, Corpus fund.
Important findings:
1. Auditing. Auditing of the records by external agencies enhances the credibility of records but
in block Kulgam only 25 per cent of
sample groups were found to have been audited by external agencies.
2. Corpus fund. Formation and circulation of corpus fund enhances financial strength of the
group. It was found only 40 per cent of
groups had 50-75 per cent circulation of corpus fund, whereas 60 per cent of the groups had less
than 50 per cent corpus fund in
circulation.
3. Members’ training. Training is an important input for capacity building of members of
SHGs. However, on this indicator, 100 per
cent sample SHGs reported that more than 50 per cent members have attended skill development
training.
4. Social and political participation by members. This activity of the SHGs was not found to
be encouraging.
5. Members of federation. No SHG was reported to be a member of any federation.

8
7
6
5
4
3
2 Marks Assigned
1
0 Marks Awarded
Fig4
10

Performance of 20 SHGs on indicators 16 to20

Category Marks Marks
S.No Indicator Frequency Percentage
Assigned Awarded
Without any
membership/
0 19 95 0
official
position
Formal
membership
official
Social and political
position in any
16 participation of 1 0 0 0
formal
members
organization
other than
P.R.I
Official
position in 4 1 5 0.20
P.R.I.
Total 4 20 100 0.20
Members of
4 0 0 0
federation
17 Members of Federation Not a member
0 20 100 0
of federation
Total 4 20 100 0
SHGs audited 2 5 25 0.50
SHGS not

18 SHGs Audit 0 15 75 0
audited
Total 2 20 100 0.50
More than 50
per cent
member 4 20 100 4
attended
training
19 Members training Less than 50
per cent
members 0 0 0 0
attended
training
Total 4 20 100 4
<50 per cent of
corpus fund in 0 12 60 0
circulation
50-75 per cent
corpus fund in 4 8 40 1.60
20 Corpus fund
circulation.
>75 per cent
0
corpus fund in 8 0 0
circulation
Total 8 20 100 1.60
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1.5 Overall performance

Indicator-wise score and aggregate score of maturity index of sampled SHGs are presented in
table-5 which gives a comprehensive picture of the maturity level of the group. The performance
SHGs in case study area of block Kulgam is found satisfactory, they score around 56 marks out
of 100.
Table5
Aggregate Score of the Maturity Index of Group
Indicators 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total
Marks
2.75 10 6 2 1 2.25 2.5 4 2 4 9.20 4.10 0 0 0 0.20 0 0.50 4 1.60 56.10
obtained
Max
5 15 6 2 2 4 6 4 2 4 10 8 4 4 2 4 4 2 4 8 100
marks
2. CONCLUSION
By employing maturity index, comprising 20 indicators, on 20 SHGs the overall score was found
to be 56 out of 100 (56 per cent). This reflects a satisfactory performance in terms of professional
character shown by the SHGs in conducting the business. However, in some major indicators
like democratic character, regularity in saving, access to records, participation of members in
meetings, and enforcement of rules-the groups‘ performance has been more than satisfactory.
While as there are certain areas in which the performance of groups is not up to mark like book

keeping, maintenance of registers, loan size, support by professional agencies, and involvement
in credit plus activities. However, a large proportion of the SHG members were found ignorant
about the amount of loan, rate of interest, quantum of subsidy, mode of subsidy delivery and
terms of loan repayment. Most of the SHG members were found investing the loan amount in
traditional activity like dairy, crewel, and carpet activity. Majority of the SHGs and individual
beneficiaries face different kinds of problems like high cost raw material, infrastructure
constraint, marketing problems, and high interest rate. So, there is urgent need to address these
problems. There is also need for capacity building of all stakeholders involved in the SHG
movement of the state to convert it into micro enterprise movement.
3. ACKNOWLEDGMENTS
We would like to thank all those who helped us in the course of our field research, especially
residents of block Kulgam. We acknowledge cooperation and help rendered by the office of
Directorate of Rural Department, the District Rural Development Agency (DRDA) Kulgam, the
Block Development Officer ( BDO) Kulgam for providing official data with out which this task
was not possible.
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District of West Bengal ,Economic Affairs Vol.56, No.2 pp 107-116
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District of West Bengal ,Economic Affairs Vol.56, No.2 pp 107-116
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13
[22] Sherin, K. (1999), Dynamics of self help group formation – A case study in Thrissur District,
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[23] National Bank Management and National Institute of Public Finance and Policy (2010),
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14
Agricultural and Rural Development in India
Dr.S.POONGODIa AND Dr.S.SARAVANAMBIGADEVIb

a &b
Vellalar College for Women (Autonomous)
Thindal, Erode-12
The Paradox and Challenges of Indian Agriculture
Indian agriculture is facing a policy paradox. Although several forecasts of the 1990s predicted
that India would be a large importer of grains in the years to follow, in fact from 2001 to 2004
India exported around 30 million tons of food grains. It was seeking primarily to liquidate its
bulging grain stocks, which reached 63 million tons in July 2002. Whereas India‘s agricultural
policy is still rooted in the goal of self-sufficiency in grains, consumption patterns are changing
fast toward high-value agricultural products such as fruits and vegetables, livestock products, and
fish. The policy environment is lagging behind the structural change occurring in India‘s
consumption and production baskets.
On another front, foreign exchange reserves, which had reached a rock-bottom US$1.2 billion in
July 1991, climbed to more than US$120 billion by the end of 2004. Nonetheless, despite
comfortable food and foreign exchange reserves and reasonably high growth in gross domestic
product (GDP) of about 6 percent annually, India still has more than 250 million underfed
people (below the poverty line) and high underemployment. This situation reflects severe

problems on the distribution front. What are the reasons behind this paradoxical situation? The
answer presumably lies in the neglect of, as well as misallocation of resources in, agriculture and
rural development, especially in the later phase of the reform process initiated in 1991. The
average annual rate of growth in agriculture fell from more than 4 percent per year during
1992/93 to 1996/97 to less than 2 percent per year during the period 1997/98 to 2002/03, and it
remains low. What led to this dramatic decline in the growth of agriculture since 1997/98? How
can it be revived? How can growth in agriculture and rural development diminish poverty
quickly? To stimulate pro-poor agricultural growth and rural development, India will need to
make some strategic choices. We propose action in five major areas that can help the government
to accelerate agricultural growth and reduce poverty, malnutrition, and unemployment quickly
and on a sustainable basis. All of these reforms can be achieved with due regard for the well-
being of the country‘s rural poor.
1. Enhancing Pro-Poor Rural and Agricultural

Investments and Cutting Subsidies Since the early 1980s public investment in agriculture has
experienced a secular decline, while input subsidies (on fertilizers, power, and canal irrigation)
have been rising. In the early years of economic reforms, an attempt was made to arrest and
reverse these trends (see Figure 1), but this effort could not be sustained. As a result the gap
between investments and subsidies kept widening. Today input subsidies, together with food
subsidies, amount to roughly five to six times the public investment in agriculture. With a
burgeoning subsidy bill and shrinking public investment, the growth impetus for agriculture has
15
been declining. Private investment in agriculture has been increasing, yet it has not fully
compensated for the loss from falling public investment. The first strategic decision must be to
raise the level of public investment in agriculture and in rural India. This move would also help
unleash private sector investment, which complements public investment. The strategy should be
to contain and target subsidies and plow the savings back into agriculture as investment IFPRI
research shows that investments in R&D have the highest impact on agricultural growth per
million rupees invested. The rates of return to public investment in research have been as high as
over 60 percent, and in extension, over 50 percent. India currently invests only about 0.5 percent
of its agricultural GDP in agricultural research, compared with 0.7 percent in the developing
countries as a whole and as much as 2–3 percent in the developed countries. These figures
suggest that government has been systematically under investing in a sector that offers a high
social return and that there is considerable scope for diverting incremental outlays to priority
areas in research.
Investment in rural roads has the most potent effect on poverty alleviation, per million
rupees invested, followed by investment in R&D. Across regions, the returns on each million
rupees invested in the less-favored (rain fed) areas of western and southern India are now higher
than in the irrigated tracts of the northwest. These rained areas were largely bypassed by the
Green Revolution. Thus any investment in this region has a win-win potential in terms of both
higher returns (efficiency) and equity. In R&D, India had a successful record of importing high
yielding seed varieties and adapting them to local conditions during the late 1960s and 1970s, an
effort that led to the Green Revolution. Although there is still ample scope for increasing rice and
wheat yields, especially in the water-abundant eastern belt, the Green Revolution has been
stagnating in the northwest states of Punjab, Haryana, and western Uttar Pradesh, as well as in
the southern states of Andhra Pradesh and Tamil Nadu. To keep pushing the production frontier

outward, India must invest in new technologies and the institutions to accompany these
technologies.
The new agricultural technologies on the horizon are largely biotechnologies. Indian
policymakers, scientists, and regulators have long supported the development of biotechnology
(including genetic modification) that provides new crops favorable to India‘s climatic areas and
is suitable for use by farmers in rural communities. One of the most important technologies in
the Indian context is one that produces drought resistance. Developing biotechnology
appropriately, however, will require effective research and reforms of the regulatory structure
and process, duly recognizing the local and international debate on biotechnology, particularly
regarding genetically modified (GM) crops. In this context, setting up a body like the National
Biotechnology Regulatory Authority (NBRA) would enhance regulation of biotechnology in
India.
Investments in advanced crop technologies for Indian farmers will pay off only if there are
accompanying investments in infrastructure. The connection of India‘s villages to information
and communications technology is an important component of these initiatives. The private
sector can be the key driving force, and many corporate giants have already entered rural areas
with a view to expanding business. But public policy should facilitate these investments in rural
areas by removing controls on private investment as well as by offering tax concessions for
investing in rural areas, in order to improve poor communities‘ access to education, market
information for farmers and other small businesses, and service information.
16
Investing in appropriate institutions is as important as investing in agricultural R&D and

infrastructure. Institutional changes are required to ensure greater transparency and
accountability in implementing agencies. India faces endemic problems stemming from poor
staff incentives and a lack of financial autonomy, accountability, and transparency in its public
sector agencies. The best solution is likely to be selective privatization that takes into account
both equity and efficiency considerations. Public investment needs to be made more pro-poor
and productive through decentralization. Community participation in constructing and
maintaining rural infrastructure is crucial for the efficient operation of financial incentives and
the establishment of a legal framework. The typical top-down approach followed so far in public
investments will not give the desired results. Heavy participation of user groups and
nongovernmental organizations (NGOs) in maintaining public infrastructure is required to turn
the process of rural development from top down to bottom up.
2. Reforms with a Human Face:

Addressing the Landless Poor Reforms in the agricultural sector is an important step toward
increasing growth rates in the Indian economy and thus reducing poverty sustainably. But many
households are not in a position to share in economic growth because of their low asset base (for
example, poor nutrition, low education, and few physical assets). Studies reveal that there is
typically little mobility out of extreme poverty, and many households remain poor for
generations. Indeed, low human capital status and an inability to build up a minimum physical
asset base play a key role in the intergenerational transmission of poverty. Any credible, broad-
based development strategy must therefore involve public policies aimed directly at promoting
asset accumulation by chronically poor households. In addition, the labor productivity of the
poor is currently impaired by nutrition problems, including ―hidden hunger‖ in the form of

micronutrient deficiencies. Agricultural research and production programs should focus on
addressing these deficiencies through supplementation, fortification of foods (including
complementary foods), and attention to making low-cost foods that are rich in micronutrients.
India is home to a wide range of social safety net programs that together attempt to address the
needs of poor households at various stages of the life cycle. For households with young children,
the Integrated Child Development Scheme (ICDS) provides take-home food rations linked to
acquiring nutrition guidance and crucial health care. To promote higher educational attainment,
the Mid-Day Meals Program provides meals to children attending school. The Public
Distribution System (PDS) provides subsidized food rations to poor households through a vast
network of fair-price shops. A range of community public works programs (such as Jawahar
Gram Samridhi Yojana or Employment Guarantee Schemes [EGSs]) provide employment to the
poor during periods of economic downturn or during the slack agricultural season. The National
Old-Age Pension program and the Annapurna program provide cash to destitute elderly
households without alternative family support. These programs should be transformed from
social assistance to social development programs that contribute directly to the creation of
physical and social assets. Although safety net programs in India vary widely and absorb
substantial public funds, their combined effectiveness is questionable. Rationed food subsidies
are often poorly targeted, and corruption prevents much of the food from reaching the intended
beneficiaries. For example, 53 percent of India‘s rural poor live in three states (Bihar, Uttar
Pradesh, and Madhya Pradesh), but their dependence on subsidized food through the PDS off-
take is only between 5 and 10 percent of their total cereal consumption—too little to make much
17
difference in their food security. The costs associated with public distribution of food are also
often unnecessarily high. There is a need to rationalize wages in public works programs,
walking the line between too-high wages, which will result in leakage of transfers to non poor
households, and too-low wages, which will undermine the very objective of the programs— that
is, poverty alleviation. These two considerations need to be balanced, in line with minimum
wage regulation. In addition, high costs associated with managing the creation of assets through
public works programs absorb scarce resources, and the resulting projects are often of low
quality or never benefit the poor. The economic inefficiencies associated with financing these
safety net and public works programs can also be substantial, as is the case with food grain
support prices that distort production incentives. These different safety net programs are often
poorly integrated, with some households receiving benefits from a number of sources and other
poor households being completely excluded. As a first step, existing social safety net programs
in India need to be revisited to assess their targeting mechanisms, coverage, cost-effectiveness,
and overall impact on poverty alleviation.
Research at IFPRI, along with several studies in India, shows that programs like the EGS
of Maharashtra to build rural infrastructure are more cost-effective in reaching the poor than is
the untargeted PDS. These public works schemes need to be scaled up to build rural
infrastructure, develop and preserve watersheds, undertake forestation, desilt canals, and so forth.
Bangladesh‘s Food for Education (FFE) scheme and India‘s own ICDS show that targeted
programs have been highly successful and are worth investigating. Under the FFE scheme, the
poor family of the school-aged child gets a quantity of subsidized food as long as the child
attends school. This program ensures higher attendance in village schools, especially of girls, and
provides food security to the poor. Such a program may be worth implementing in India on a

pilot basis. Achieving reforms for the landless poor requires developing and applying credible
evaluation techniques that can then inform the design and implementation of programs. Given
budget constraints and the extent of poverty in India, the country cannot afford to tackle the
problem of assisting the landless poor without substantial improvements in the cost-effectiveness
of the overall social safety net system. Fortunately, we have learned much from diverse
experiences in several developing countries, and the wide variation in program performance
across Indian states may also be a valuable source of lessons for future policy reforms.
3. Addressing the Water Challenge
Rapid growth in nonagricultural water demand, the unsustainable overdraft of groundwater,
and a slowdown in the growth of water supply investments are leading to growing water
shortages for agriculture in much of India. These shortages are likely to worsen in the coming
years if business as usual continues, and the local impacts on agricultural employment and rural
livelihoods could be severe. Concerted policy efforts, however, could significantly mitigate the
negative effects of growing water shortages. The ultimate irrigation potential of the country is
roughly 140 million hectares, of which not more than 70 percent has been exploited. During the
Ninth Five-Year Plan (1997–2002), irrigation grew at only about half of its target rate. Large
investments would be required to complete several hundred irrigation schemes that have gone
unfinished for years because of severe resource constraints. Additional resources for those
projects nearing completion would bring high returns to investments already made. Part of the
solution to water scarcity, however, lies outside of the irrigation sector. Increased investments in
agricultural research could boost agricultural productivity to compensate for the diversion of
18
water from agriculture to domestic and industrial uses. Crop research needs to target rain fed
production as well as irrigated areas, taking pressure off the irrigated crops sector. In the
domestic and industrial water sectors, improving both efficiency and equity through increased
water prices would provide incentives for conservation, cover the costs of delivery, and generate
adequate revenues to finance the needed growth in supplies and expanded coverage of clean
piped water. At the same time, pressure on water transfers from agriculture would be reduced.
Generalized domestic and industrial water subsidies need to be replaced with subsidies targeted
to the poor. In the irrigation sector, water policy should be designed to induce investment in
improved technology and conservation of water and to encourage diversification away from
irrigated cereals into crops that give more value per unit of water. It is feasible to design and
implement water pricing systems on the basis of water rights that would introduce positive
incentives for efficient water use and crop diversification, recover operations and maintenance
(O&M) costs, and protect and even increase farm incomes. Water rights, combined with
appropriate incentives, are essential for establishing rational water allocation because they
provide users with the security to invest in water-saving technology and practices. Because of the
large number of small farmers in Indian irrigation systems, in most cases it is preferable to assign
water rights to water user associations rather than to individual farmers. A water brokerage
system with a river basin authority, or an irrigation system that brokers water trades among
irrigators and between irrigation and non irrigation water uses, could establish incentives to use
water efficiently without reducing farm incomes. A base water right would be established at
major turnouts to water user associations. The user group would be responsible for internal water
allocation. A fixed base charge would be applied to the initial (historical) quantity, sufficient to
cover O&M and longer term asset replacement (depreciation) costs. For demand above the base
water right, a price equal to the value of water in alternative uses would be charged to users; for

demand below the base right, the same price would be paid to the water user for not using the
water. This system would facilitate the mutually agreed purchase and transfer of water to higher-
valued uses. The promise of efficient water use and the allocation of water resources without
harming the welfare of irrigators and other rural water users make the establishment of water
rights, together with appropriate incentives, one of the highest priorities for water reform.
4. Toward High-Value Agriculture

Given sustained increases in per capita incomes of about 4 percent per year during the past
two decades, consumption patterns in India are changing away from cereals to high-value
agricultural products. How fast has the consumption basket of an average Indian changed? Data
from the National Sample Survey Organization (NSSO) show that per capita consumption of
cereals from 1977 to 1999, for example, declined from 192 to 152 kilograms per year in rural
areas and from 147 to 125 kilograms in urban areas. The consumption of fruits, on the other
hand, increased by 553 percent, of vegetables by 167 percent, of milk and milk products by 105
percent, and of meat, eggs, and fish by 85 percent in rural areas over the same period. Similar
changes occurred in urban diets. These dramatic changes indicate a structural shift in Indian
diets. Add to this the new export market opportunities for many of the same products, owing to
trade liberalization, and there is a happy match between the demands of the market and the need
for farmers to diversify into higher-value activities. Further, high-value agricultural products
have higher employment elasticity and can be suitable for smallholders, if they can participate.
In this new situation, more of the energies and resources of the agricultural sector can be
19
unleashed to produce the kinds of high-value foods and products that are now in high demand by
India‘s growing middle classes and urban dwellers and that have new export market
opportunities. A reinvigorated agricultural and agribusiness sector could thus continue to be a
major engine of income and employment growth for the country. Despite the tremendous
opportunities ahead, success is not yet assured.
Important challenges will need to be overcome.

The first challenge is to further shift the government‘s priorities from heavy support and
protection of food staples to promotion of agricultural diversification, processing, and
commercialization. Simply put, most farmers are not going to get rich by growing cereals when
there are already national surpluses, demand growth is slow, and world markets are glutted with
the subsidized production of rich-country farmers. Farmers must shift into higher-value products
to increase their incomes. A set of public policies and investments is required to fully unleash
this new potential. This set must include additional public investment in the kinds of rural
infrastructure and technologies needed for these new high-value activities, improvements in
marketing and distribution systems for higher-value and more perishable foods, and further
liberalization of the agro industrial sector. The private business sector can and should play a
dominant role in these higher-value market chains, and public policy must strengthen the
enabling environment. This change will require a fundamental shift in thinking in many public
agencies that are still geared toward the dominant role that the state played in the market chains
for food staples during the Green Revolution era. Although some of the funding for these new
investments will come from the private sector, new public investments are also needed. The
needed funds might be obtained by reducing some of 4the huge subsidies that are still maintained
on fertilizers, credit, and water for the food staples sector and that no longer serve a useful

purpose. This could be a win-win strategy for farmers and the government and at the same time
could contribute to national economic growth.
The second challenge for the ―new‖ high-value agriculture is to make it pro-poor. Left to
market forces alone, the major beneficiaries of the new high-value agriculture will be mostly the
larger and commercially oriented farms, as well as farms that are well connected to roads and
markets. The majority of the 300 million or so poor people in India are rural people who depend
on agriculture for their living, and many live in the less-favored regions. These people must not
get left further behind during the next phase of India‘s agricultural development. Fortunately,
there is great opportunity to guide the new high value agriculture so that small farms and even
many less-favored regions can be major participants. Achieving broad participation will require
improving infrastructure and education in many less favored regions and communities, ensuring
that small farms get the technologies and key inputs they need, and promoting producer
marketing organizations that can link small farmers to the new market chains (supermarkets,
contractors, processors, exporters, and the like). Small farmers cannot do all of these things on
their own, and the public sector, private sector, and NGOs all have important roles to play.
Because high-value agriculture demands more working capital, which small farmers often lack, a
major effort must be made to reform the rural credit delivery system to reach smallholders.
Innovative institutions promoting vertical coordination between farms, firms, and forks
(supermarkets) would reduce transaction costs and market risks and would also act as a conduit
to funnel more credit into this venture, especially for smallholders. This system would help lay a
20
Foundation for globally competitive agriculture in which smallholders can also participate and
prosper. Public policy can make a major contribution by facilitating farmer organizations,
standardization, transparent food safety policies, and contract security between farmers and the
processing and retail industry.
A third challenge will be overcoming many of the environmental problems that now plague
agriculture. Water scarcities will continue to grow, and farmers must learn to use less water and
to be less polluting. Land degradation and deforestation must also be contained. A shift toward
more diversified and higher-value farming systems will help, both because many of the new
crops need less water and because, by increasing returns to land, small farmers will have less
need to overexploit poor lands and soils. Although agriculture can make a significant
contribution to growth, employment creation, and poverty reduction, on its own it will not drive
the full economic transformation that is now possible for India. A fourth challenge, therefore, is
for policymakers to find ways of accelerating growth in the service and manufacturing sectors,
which will require continued economic liberalization and privatization.
5. Trade and Market Policy Reforms

The policy reforms of the 1990s more or less eliminated the bias against agriculture by
lowering industrial tariffs and liberalizing exports of agricultural commodities. This change
improved the relative incentives environment (measured as the ratio of agricultural prices to
prices of manufactured goods) in favor of agriculture, providing a strong boost to private sector
investments in agriculture. The world prices of most agricultural commodities fell sharply,
primarily triggered by the East Asian crisis. This decline highlighted the difficulties in
integrating domestic agricultural markets with world markets. Whereas developed countries such
as the United States and the European Union countries resorted to subsidizing their farmers,

developing country policymakers did not have many options and accepted the loss of those
markets. This outcome raises the fundamental issue of establishing and strengthening a rule-
based system in the global trade of agricultural commodities. In an increasingly interdependent
world, it is neither desirable nor feasible to remain insulated from global markets. India, as a
major player in the developing world, should play its due role in WTO negotiations and push for
multilateral global liberalization of agricultural trade. Although India should insist on substantial
cuts in the export subsidies and domestic support being provided to agriculture in the
Organization for Economic Co-operation and Development (OECD) countries, it should also be
ready to open up its own markets step by step.
Major trade increases are going to take place within the developing world over the next two
decades or so, and therefore it would be in India‘s interest to form a strong coalition of
developing countries to open markets while pressing for reducing distortions in developed-
country agricultural policies. India‘s role in the G20 coalition at Cancun proved strong in putting
pressure on the OECD countries, but India and its coalition partners Brazil, China, South Africa,
and others must engage further to break the deadlock and argue for rules-based open trade. In the
event of a slowdown in multilateral negotiations, given the complexities, India should open a
second track of negotiations on bilateral and regional free trade agreements with major
developing countries in the region (like China) and beyond (like Brazil and South Africa).
India can harvest rich returns from trade liberalization, provided it also carries out
large-scale reforms to streamline domestic markets and put in place the infrastructure and
institutions to connect local markets with national and global markets. These reforms would
21
involve removing all controls on the functioning of domestic markets, such as movement
restrictions, stocking limits on private trade, levies on rice and sugar mills, controls on
investments in large-scale agro processing and on foreign investments in retail chains, and bans
on direct buying from farmers by processors. India should also introduce new institutions such as
futures trading that can reduce market risk and promote investments. Further, to integrate the
domestic markets with world markets smoothly and manage trade liberalization more effectively,
India needs institutions that can closely monitor movements in world and domestic prices and
take timely and appropriate actions to avoid major shocks. Here, an institution like an agriculture
tariff commission may be more useful than the existing Commission for Agricultural Costs and
Prices.
Summary
In summary, we suggest five areas for action to put rural India on a higher growth
trajectory that would cut hunger, malnutrition, and unemployment at a much faster pace than has
been the case so far. The five areas for action are interlinked and would best work if pursued in
conjunction. We emphasize investments with a human face that include and reach out to the rural
poor and a reorientation of subsidies toward such investments.
1. India should increase investments in rural infrastructure (including transport and information
technology that connects villages) and agricultural R&D (leading to improved technologies for
farmers). This is our most important suggestion. To ensure high returns on these investments,
India will have to invest in institutions that make implementing agencies transparent and
accountable to user groups. Part of this expansion of pro-poor investments in rural India should
be financed by reducing food and input subsidies, making them available only to vulnerable
groups.

2. India should reorient its social safety nets to create more employment in rural areas; help
strengthen the human resource base through education, nutrition, and empowerment of women;
and build physical infrastructure. In this context, schemes like the EGS of Maharashtra to build
rural infrastructure and FFE, well tested in Bangladesh, are much more promising than the
untargeted PDS. These social investments must also address the high prevalence of micronutrient
deficiencies (especially of iron, vitamin A, and zinc) among the poor.
3. Water is going to be increasingly scarce. Investing large sums in new mega-irrigation schemes
may not be the best course of action, but it is important to complete those in which a lot of
money has already been invested. Overall, however, managing water use through institutional
changes, such as water rights that are based on farmer groups and water-harvesting schemes in
dry areas with local participation, are likely to be more rewarding. Price reforms in irrigation,
and even power supplies for agriculture, can succeed only if accompanied by suitable
institutional reforms.
4. Indian agriculture faces promising opportunities in the production and marketing of high-value
livestock products, fruits and vegetables, and fishery. To exploit these opportunities, India must
liberalize its marketing and trade policies to encourage vertical coordination between farms,
firms, and forks (supermarkets); facilitate increased flow of rural credit, especially to
smallholders, through, say, nonbanking financial intermediaries; and withdraw any special
concessions in support of food grain policies.
5. Trade liberalization in agriculture has the potential to bring rich dividends to developing
countries, including India. To realize this potential, India must work toward establishing and
22
strengthening a rules-based multilateral trading system through WTO negotiations. In the event
of major hurdles in WTO negotiations and a delay in reaching any substantive agreement, India
should explore its second-best options of reaching bilateral or regional free trade agreements
with major developing countries in the region and beyond. Furthermore, to exploit the full
potential of trade liberalization, India should carry out ―behind the border‖ reforms by
streamlining its own domestic markets, institutions, and infrastructure.
23
Agriculture & Rural Development

G.VAISHNAVEEa
a
ASSISTANT PROFESSOR IN COMMERCE (CA), Dr.N.G.P. ARTS & SCIENCE COLLEGE,
KALAPATTI.
ABSTRACT
For the 70 percent of the world's poor who live in rural areas, agriculture is the main
source of income and employment. But depletion and degradation of land and water pose serious
challenges to producing enough food and other agricultural products to sustain livelihoods here
and meet the needs of urban populations. Promote pro-poor rural and agricultural development
by increasing investments in rural infrastructure and agricultural research and development
(R&D).Reorient social safety nets to create more employment in rural areas; help strengthen the
human resource base through education, nutrition, and empowerment of women; and build
physical infrastructure.
Keywords: Agriculture, Employment, Human resource.
INTRODUCTION
Although agriculture contributes only 21% of India‘s GDP, its importance in the
country‘s economic, social, and political fabric goes well beyond this indicator. The rural areas
are still home to some 72 percent of the India‘s 1.1 billion people, a large number of whom are

poor. Most of the rural poor depend on rain-fed agriculture and fragile forests for their
livelihoods.
The sharp rise in food grain production during India‘s Green Revolution of the 1970s
enabled the country to achieve self-sufficiency in food grains and stave off the threat of famine.
Agricultural intensification in the 1970s to 1980s saw an increased demand for rural labor that
raised rural wages and, together with declining food prices, reduced rural poverty.
Although much slower, agricultural growth in the 1990s reduced rural poverty to 26.3
percent by 1999/00. Since then, however, the slowdown in agricultural growth has become a
major cause for concern. India‘s rice yields are one-third of China‘s and about half of those in
Vietnam and Indonesia. With the exception of sugarcane, potato and tea, the same is true for
most other agricultural commodities.
ISSUES AND CHALLENGES

Slow Down in Agricultural and Rural Non-Farm Growth: Both the poorest as well as
the more prosperous ‗Green Revolution‘ states of Punjab, Haryana and Uttar Pradesh have
recently witnessed a slow-down in agricultural growth. Some of the factors hampering the
revival of growth are:
24
Poor composition of public expenditures

Public spending on agricultural subsidies is crowding out productivity-enhancing
investments such as agricultural research and extension, as well as investments in rural
infrastructure, and the health and education of the rural people. In 1999/2000, agricultural
subsidies amounted to 3% of GDP and were over 7 times the public investments in the sector.
Over-regulation of domestic agricultural trade: While economic and trade reforms in the
1990s helped to improve the incentive framework, over-regulation of domestic trade has
increased costs, price risks and uncertainty, undermining the sector‘s competitiveness.
Government interventions in labor, land, and credit markets: More rapid growth of the
rural non-farm sector is constrained by government interventions in factor markets -- labor, land,
and credit -- and in output markets, such as the small-scale reservation of enterprises.
Inequitable allocation of water

Many states lack the incentives, policy, regulatory, and institutional framework for the
efficient, sustainable, and equitable allocation of water.
Deteriorating irrigation infrastructure

Public spending in irrigation is spread over many uncompleted projects. In addition,
existing infrastructure has rapidly deteriorated as operations and maintenance is given lower
priority.

Inadequate Access to Land and Finance
Stringent land regulations discourage rural investments: While land distribution has
become less skewed, land policy and regulations to increase security of tenure (including
restrictions or bans on renting land or converting it to other uses) have had the unintended effect
of reducing access by the landless and discouraging rural investments.
Computerization of land records has brought to light institutional weaknesses: State

government initiatives to computerize land records have reduced transaction costs and increased
transparency, but also brought to light institutional weaknesses.
Rural poor have little access to credit: While India has a wide network of rural finance
institutions, many of the rural poor remain excluded, due to inefficiencies in the formal finance
institutions, the weak regulatory framework, high transaction costs, and risks associated with
lending to agriculture.
Weak Natural Resources Management

One quarter of India‘s population depends on forests for at least part of their livelihoods.
A purely conservation approach to forests is ineffective:

Experience in India shows that a purely conservation approach to natural resources
management does not work effectively and does little to reduce poverty.
25
Weak resource rights for forest communities:

The forest sector is also faced with weak resource rights and economic incentives for
communities, an inefficient legal framework and participatory management, and poor access to
markets.
Weak delivery of basic services in rural areas

Low bureaucratic accountability and inefficient use of public funds: Despite large
expenditures in rural development, a highly centralized bureaucracy with low accountability and
inefficient use of public funds limit their impact on poverty. In 1992, India amended its
Constitution to create three tiers of democratically elected rural local governments bringing
governance down to the villages. However, the transfer of authority, funds, and functionaries to
these local bodies is progressing slowly, in part due to political vested interests. The poor are not
empowered to contribute to shaping public programs or to hold local governments accountable.
CONCLUSION
To stimulate pro-poor agricultural growth and rural development, India will need to make
some strategic choices. We propose action in five major areas that can help the government to
accelerate agricultural growth and reduce poverty, malnutrition, and unemployment quickly and
on a sustainable basis. All of these reforms can be achieved with due regard for the well-being of
the country‘s rural poor.
26
AGRICULTURAL AND RURAL DEVELOPMENT IN INDIA – AN OVERVIEW
Dr.(Mrs.)S.Kalaiselvia and Mrs.P.Janakib

a
Head and Assistant Professor of Commerce (CA),Vellalar College for Women (Autonomous),
Erode-12.
b
Assistant Professor of Commerce, Vellalar College for Women (Autonomous), Erode-12.
INTRODUCTION
While agriculture‘s share in India‘s economy has progressively declined to less than 15%
due to the high growth rates of the industrial and services sectors, the sector‘s importance in
India‘s economic and social fabric goes well beyond this indicator. First, nearly three-quarters of
India‘s families depend on rural incomes. Second, the majority of India‘s poor (some 770 million
people or about 70 percent) are found in rural areas. And third, India‘s food security depends on
producing cereal crops, as well as increasing its production of fruits, vegetables and milk to meet
the demands of a growing population with rising incomes. To do so, a productive, competitive,
diversified and sustainable agricultural sector will need to emerge at an accelerated pace.
India is a global agricultural powerhouse. It is the world‘s largest producer of milk, pulses,
and spices, and has the world‘s largest cattle herd (buffaloes), as well as the largest area under
wheat, rice and cotton. It is the second largest producer of rice, wheat, cotton, sugarcane, farmed
fish, sheep & goat meat, fruit, vegetables and tea. The country has some 195 m ha under
cultivation of which some 63 percent are rain fed (roughly 125m ha) while 37 percent are
irrigated (70m ha). In addition, forests cover some 65m ha of India‘s land.

CHALLENGES
Three agriculture sector challenges will be important to India‘s overall development and the
improved welfare of its rural poor:
Raising agricultural productivity per unit of land

Raising productivity per unit of land will need to be the main engine of agricultural growth
as virtually all cultivable land is farmed. Water resources are also limited and water for irrigation
must contend with increasing industrial and urban needs. All measures to increase productivity
will need exploiting, amongst them: increasing yields, diversification to higher value crops, and
developing value chains to reduce marketing costs.
Reducing rural poverty through a socially inclusive strategy that comprises both
agriculture as well as non-farm employment
Rural development must also benefit the poor, landless, women, scheduled castes and tribes.
Moreover, there are strong regional disparities: the majority of India‘s poor are in rain-fed areas
or in the Eastern Indo-Gangetic plains. Reaching such groups has not been easy. While progress
has been made - the rural population classified as poor fell from nearly 40% in the early 1990s to
below 30% by the mid-2000s (about a 1% fall per year) – there is a clear need for a faster
reduction. Hence, poverty alleviation is a central pillar of the rural development efforts of the
Government and the World Bank.
27
Ensuring that agricultural growth responds to food security needs

The sharp rise in food-grain production during India‘s Green Revolution of the 1970s
enabled the country to achieve self-sufficiency in food-grains and stave off the threat of famine.
Agricultural intensification in the 1970s to 1980s saw an increased demand for rural labor that
raised rural wages and, together with declining food prices, reduced rural poverty. However
agricultural growth in the 1990s and 2000s slowed down, averaging about 3.5% per annum, and
cereal yields have increased by only 1.4% per annum in the 2000s. The slow-down in
agricultural growth has become a major cause for concern. India‘s rice yields are one-third of
China‘s and about half of those in Vietnam and Indonesia. The same is true for most other
agricultural commodities.
PRIORITY AREAS FOR SUPPORT
1. ENHANCING AGRICULTURAL PRODUCTIVITY, COMPETITIVENESS, AND

RURAL GROWTH:
Promoting new technologies and reforming agricultural research and extension

Major reform and strengthening of India‘s agricultural research and extension systems is one
of the most important needs for agricultural growth. These services have declined over time due
to chronic underfunding of infrastructure and operations, no replacement of aging researchers or
broad access to state-of-the-art technologies. Research now has little to provide beyond the time-
worn packages of the past. Public extension services are struggling and offer little new

knowledge to farmers. There is too little connection between research and extension, or between
these services and the private sector.
Improving Water Resources and Irrigation/Drainage Management

Agriculture is India‘s largest user of water. However, increasing competition for water
between industry, domestic use and agriculture has highlighted the need to plan and manage
water on a river basin and multi-sect oral basis. As urban and other demands multiply, less water
is likely to be available for irrigation. Ways to radically enhance the productivity of irrigation
(―more crop per drop‖) need to be found. Piped conveyance, better on-farm management of
water, and use of more efficient delivery mechanisms such as drip irrigation are among the
actions that could be taken. There is also a need to manage as opposed to exploit the use of
groundwater. Incentives to pump less water such as levying electricity charges or community
monitoring of use have not yet succeeded beyond sporadic initiatives. Other key priorities
include: (i) modernizing Irrigation and Drainage Departments to integrate the participation of
farmers and other agencies in managing irrigation water; (ii) improving cost recovery; (iii)
rationalizing public expenditures, with priority to completing schemes with the highest returns;
and (iv) allocating sufficient resources for operations and maintenance for the sustainability of
investments.
28
Facilitating agricultural diversification to higher-value commodities

Encouraging farmer‘s to diversify to higher value commodities will be a significant factor for
higher agricultural growth, particularly in rain-fed areas where poverty is high. Moreover,
considerable potential exists for expanding agro-processing and building competitive value
chains from producers to urban centers and export markets. While diversification initiatives
should be left to farmers and entrepreneurs, the Government can, first and foremost, liberalize
constraints to marketing, transport, export and processing. It can also play a small regulatory
role, taking due care that this does not become an impediment.
Promoting high growth commodities

Some agricultural sub-sectors have particularly high potential for expansion, notably dairy.
The livestock sector, primarily due to dairy, contributes over a quarter of agricultural GDP and is
a source of income for 70% of India‘s rural families, mostly those who are poor and headed by
women. Growth in milk production, at about 4% per annum, has been brisk, but future domestic
demand is expected to grow by at least 5% per annum. Milk production is constrained, however,
by the poor genetic quality of cows, inadequate nutrients, inaccessible veterinary care, and other
factors. A targeted program to tackle these constraints could boost production and have good
impact on poverty.
Developing markets, agricultural credit and public expenditures

India‘s legacy of extensive government involvement in agricultural marketing has created

restrictions in internal and external trade, resulting in cumbersome and high-cost marketing and
transport options for agricultural commodities. Even so, private sector investment in marketing,
value chains and agro-processing is growing, but much slower than potential. While some
restrictions are being lifted, considerably more needs to be done to enable diversification and
minimize consumer prices. Improving access to rural finance for farmers is another need as it
remains difficult for farmers to get credit. Moreover, subsidies on power, fertilizers and irrigation
have progressively come to dominate Government expenditures on the sector, and are now four
times larger than investment expenditures, crowding out top priorities such as agricultural
research and extension.
2. POVERTY ALLEVIATION AND COMMUNITY ACTIONS

While agricultural growth will, in itself, provide the base for increasing incomes, for the 170
million or so rural persons that are below the poverty line, additional measures are required to
make this growth inclusive. For instance, a rural livelihoods program that empowers
communities to become self-reliant has been found to be particularly effective and well-suited
for scaling-up. This program promotes the formation of self-help groups, increases community
savings, and promotes local initiatives to increase incomes and employment. By federating to
become larger entities, these institutions of the poor gain the strength to negotiate better prices
and market access for their products, and also gain the political power over local governments to
provide them with better technical and social services. These self-help groups are particularly
effective at reaching women and impoverished families.
29
3. SUSTAINING THE ENVIRONMENT AND FUTURE AGRICULTURAL

PRODUCTIVITY
In parts of India, the over-pumping of water for agricultural use is leading to falling
groundwater levels. Conversely, water-logging is leading to the build-up of salts in the soils of
some irrigated areas. In rain-fed areas on the other hand, where the majority of the rural
population live, agricultural practices need adapting to reduce soil erosion and increase the
absorption of rainfall. Overexploited and degrading forest land needs mitigation measures. There
are proven solutions to nearly all of these problems. The most comprehensive is through
watershed management programs, where communities engage in land planning and adopt
agricultural practices that protect soils, increase water absorption and raise productivity through
higher yields and crop diversification. At issue, however, is how to scale up such initiatives to
cover larger areas of the country. Climate change must also be considered. More extreme events
– droughts, floods, erratic rains – are expected and would have greatest impact in rain-fed areas.
The watershed program, allied with initiatives from agricultural research and extension, may be
the most suited agricultural program for promoting new varieties of crops and improved farm
practices. But other thrusts, such as the livelihoods program and development of off-farm
employment may also be key.
WORLD BANK SUPPORT

With some $5.5 billion in net commitments from both IDA and IBRD, and 24 ongoing
projects, the World Bank‘s agriculture and rural development program in India is by far the
Bank‘s largest such program worldwide in absolute dollar terms. This figure is even higher when

investments in rural development such as rural roads, rural finance and human development are
included. Nonetheless, this amount is relatively small when compared with the Government‘s -
both central and state - funding of public programs in support of agriculture. Most of the Bank‘s
agriculture and rural development assistance is geared towards state-level support, but some also
takes place at the national level.
The Bank‘s Agricultural and Rural Development portfolio is clustered across three broad themes
with each project, generally, showing a significant integration of these themes.
Agriculture, watershed and natural resources management Water & irrigated agriculture Rural
livelihood development Over the past five to ten years, the Bank has been supporting: R&D in
Agricultural Technology through two national level projects with pan-India implementation (the
National Agriculture Technology Project and the National Agriculture Innovation Project)
coordinated by the Government of India‘s Indian Council for Agricultural Research (ICAR).
Dissemination of Agricultural Technology: New approaches towards the dissemination of

agricultural technology such as the Agriculture Technology Management Agency (ATMA)
model have contributed to diversification of agricultural production in Assam and Uttar Pradesh.
This extension approach is now being scaled-up across India.
30
Better delivery of irrigation water: World Bank support for the better delivery of irrigation water
ranges from projects covering large irrigation infrastructure to local tanks and ponds. Projects
also support the strengthening of water institutions in several states (Andhra Pradesh, Karnataka,
Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh) improved groundwater management

practices (for instance, in the upcoming Rajasthan Agriculture Competitiveness Project).
Sustainable agricultural practices through watershed and rain fed agriculture development
(Karnataka, Himachal Pradesh, Uttarakhand), soil reclamation efforts (Uttar Pradesh) and, more
recently, improved groundwater management practices (for instance, in the upcoming Rajasthan
Agriculture Competitiveness Project).
Improved access to rural credit and greater gender involvement in rural economic activities
through rural livelihood initiatives undertaken by a number of states (Andhra Pradesh, Bihar,
Madhya Pradesh, Orissa, Rajasthan, Tamil Nadu) and soon to be scaled up by GOI with Bank
support through a National Rural Livelihood Mission.
Agricultural insurance by advising GOI on how to improve the actuarial design and
implementation of the insurance program (e.g. rating methodology and product design, index
insurance, use of mobile and remote sensing technology to measure yields, etc.).
Improved farmer access to agriculture markets through policy reforms and investments under the
Maharashtra Agricultural Competitiveness Project which aims to reform regulated wholesale
markets and provide farmers with alternative market opportunities.

The land policy agenda through analytical work as well as non-lending technical assistance in
support of GOI‘s National Land Records Modernization Program.
Better rural connectivity through IDA support to the Prime Minister‘s, National Rural Roads
Program (PMGSY), and by connecting rural poor and smallholder farmers through collective
action to public services through Self-Help Groups (and SHG federations), Water User
Associations and Farmer Producer Organizations. Recently the Bank‘s Board of Executive
Directors approved the National Rural Livelihood Mission, which supports SHG approaches
through a pan-India approach.
CONCLUSION
In order to promote agricultural and rural development, the Government of India places high
priority on reducing poverty by raising agricultural productivity. However, bold action from
policymakers will be required to shift away from the existing subsidy-based regime that is no
longer sustainable, to build a solid foundation for a highly productive, internationally
competitive, and diversified agricultural sector.
31
INDIAN AGRICULTURE: PROBLEMS AND ISSUES
Dr.(Mrs).S. DEEPAa
a
Assistant Professor, Department of Commerce, Sri Sarada College for Women (Autonomous),
Salem - 636 016. Tamil Nadu, India.
ABSTRACT: India is known as "Land of Villages". About 67% of India's population lives in
villages. The main occupation of them is agriculture and other activities related to agriculture.
Agriculture is the largest and dominant sector of our economy providing livelihood to about 70%
of the population of India. Agriculture plays a pivotal role in the Indian economy. Although its
contribution to gross domestic product (GDP) is now around one sixth, it provides employment
to 56% of the Indian workforce. Also, the forward and backward linkage effects of agriculture
growth have increased the incomes in the non-agriculture sector. The growth of some
commercial crops has significant potential for promoting exports of agricultural commodities
and bringing about faster development of agro-based industries.
KEY WORDS
Agriculture, craftsmen, consumption, economy.
INTRODUCTION

India is known as "Land of Villages". About 67% of India's population lives in villages.
The main occupation of them is agriculture and other activities related to agriculture. Agriculture
is the largest and dominant sector of our economy providing livelihood to about 70% of the
population of India. Agriculture is the backbone of the Indian economy. Agricultural produce has
been the principal source of raw material. This shows the relative importance and dominance of
agriculture in the Indian Economy.
HISTORY AND CHARACTERISTICS

Agriculture in India has a long history, dating back ten thousand years. It began by 9000
BC as a result of early cultivation of plants and domestication of crops and animals. With the
development of agricultural implements and techniques, settled life soon started. Double
monsoons led to two harvests being reaped in one year. Until British Rule, the Indian economy
had been known for centuries for its self-contained village communities, consisting of
agriculturists, cottage industrialists, village craftsmen, artisan professions, unskilled workers and
village officials. These communities played a major role in not only meeting the needs of the
village economy but producing and exporting various products to foreign countries. During those
times agriculture was a way of living and the farmer produced merely for self-consumption.
Food crops like wheat and rice were the most important. Since plants and animals were
considered essential to their survival, people started worshipping and respecting them.
32
The middle ages saw irrigation channels reach a new level of sophistication in India Land and
water management systems were developed to provide uniform growth. The Indian
Agricultural Research Institute (IARI), established in 1905, was responsible for research leading
to the Green Revolution of the 1970s. The Indian Council of Agricultural Research (ICAR) is the
apex body in agriculture and allied fields, including research and education. The Union Minister
of Agriculture is the President of the ICAR. The Indian Agricultural Statistics Research Institute
develops new techniques for the design of agricultural experiments, analyses data in agriculture
and specializes in statistical techniques for animal and plant breeding.
Agriculture provides gainful employment to nearly two-thirds of the population and
contributes about 30% to the national income. It supplies raw material to various agro-based
industries and earns foreign exchange. Today, India ranks second worldwide in farm output and
is the largest producer of fresh fruit, anise, fennel, coriander, tropical fresh fruit, jute, pigeon
peas, pulses, spices, millets, castor oil seed, sesame seeds, sunflower seeds, lemons, limes, cow's
milk, dry chillies, peppers, chick peas, cashew nuts, okra, ginger, turmeric guavas, mangoes, goat
milk, buffalo milk and meat. It also has the world's largest cattle population. It is the second
largest producer of cashews, cabbages, cotton seed and lint, fresh vegetables, garlic, eggplant,
goat meat, silk, nutmeg, mace, cardamom, onions, wheat, rice, sugarcane, lentil, dry beans,
groundnut, tea, green peas, cauliflowers, potatoes, pumpkins, squashes, gourds and inland fish. It
is the third largest producer of tobacco, sorghum, coconuts, hen's eggs and tomatoes. India
accounts for 10% of the world fruit production with first rank in the production of mangoes,
papaya, banana and sapota.
Despite this, the share of agriculture in the GDP is declining although it is the largest
economic sector and plays a significant role in the India‘s socio-economic development. India's

population is growing faster than its ability to produce rice and wheat and as most of her
population depend on rural employment for a living, this is a cause of concern for policy makers.
The rural sector in India, as in several other developing countries, is still evolving and
poses a variety of challenges. Some of the common problems faced are discussed in this paper.
PROBLEMS FACED BY THE INDIAN AGRICULTURE SECTOR
Rudimentary infrastructure and policies leads to slow agricultural growth

Slow agricultural growth is a matter of concern as most of India‘s population is
dependent on rural employment for a living. Current agricultural practices are neither
economically nor environmentally sustainable and India's yields for many agricultural
commodities are low. Poorly maintained irrigation systems and lack of good extension services
are among the factors responsible. Farmers' access to markets is hampered by poor roads,
rudimentary market infrastructure, and excessive regulation.
India has inadequate infrastructure and services because of low investment. The farmers
cannot afford irrigation systems that would increase productivity. Most big farms are family-
owned and run and do not take advantage of economies of scale. Low investment in farms leads
to lower production, inefficiency and higher costs, one of the causes of food inflation in India.
33
THE AVERAGE SIZE OF LAND HOLDINGS IS SMALL

The average size of land holdings is less than 20,000 m² and subject to fragmentation due
to land ceiling acts and, in some cases, family disputes. Such small holdings are often
overmanned, resulting in disguised unemployment and low productivity of labour.
POOR SOCIO-ECONOMIC CONDITION OF FARMERS

Illiteracy, the root cause of farmers‘ poor socioeconomic condition, should be tackled
vigorously. Though the government is taking the initiative by adopting policies like universal
education, a highly centralized bureaucracy with low accountability and inefficient use of public
funds limits their impact on poverty. Lack of technical knowledge and awareness are also
responsible for low productivity, adding to the problem of poverty among farmers.
USE OF TECHNOLOGY IS INADEQUATE

Adoption of modern agricultural practices and use of technology is inadequate, hampered
by ignorance, high costs and impracticality in the case of small land holdings. In India, farming
practices are too haphazard and non-scientific and need some forethought before implementing
any new technology.
NO PROPER MANAGEMENT OF IRRIGATION

Irrigation facilities are inadequate and there is no effective system management for how
much water is stored, how much is used for irrigation or what value can be added to this water.
Consequently, farmers depend on rainfall, specifically the monsoon season. A good monsoon
results in robust growth for the economy as a whole, while a poor monsoon leads to sluggish

growth.
THE AGRICULTURE SECTOR FACES THE DISASTROUS CONSEQUENCES OF

HAZARDS
Unique geo-climatic conditions make India vulnerable to hazards and disasters, both
natural and human-induced. Common natural hazards are floods, cyclones, landslides, forest
fires, avalanches, earthquakes, tsunamis and pest/disease outbreaks in plants and animals.
Manmade disasters include fire, spurious seed, fertilizers and pesticides and price fluctuation.
DEPENDENCE OF AGRICULTURE ON WEATHER

Agriculture in India and many other developing countries depends on the monsoon
because irrigation facilities are not fully developed. If the monsoon fails or it rains heavily or
untimely, it ruins agricultural production. Agriculture is also a gamble with temperature. Too
high a temperature negatively affects the productivity of a crop.
DISASTERS LEADING TO RURAL POVERTY

Rural poverty has two characteristics: the poverty of rural human beings and the poverty
of weather prone rural areas. The degradation of natural resource may be caused by drought or
flood because of global warming or by modern farming methods which affect the land
negatively, ultimately making rural people poor.
34
POPULATION PRESSURE
India has a huge population of over one billion and it is increasing at a very fast rate.
According to census figures the overall density of population is 324 persons per sq. km. This is
likely to increase further in future. This has created great demand for land. Every bit of land has
been brought under the plough. Even the hill slopes have been cut into terraces for cultivation.
DEPLETED SOILS
Indian soils have been used for growing crops for thousands of years which have resulted
in the depletion of soil fertility. With deforestation, the sources of maintaining natural fertility of
soil has been drying out. Lack of material resources and ignorance of scientific knowledge have
further depleted the soils of the natural fertility.
STORAGE OF FOOD GRAINS

Storage of food grains is a big problem. Nearly 10 per cent of our harvest goes waste
every year in the absence of proper storage facilities. This colossal wastage can be avoided by
developing scientific ware-housing facilities. The government has taken several steps to provide
storage facilities.
FUTURE TRENDS OF AGRICULTURE IN INDIA

1. One of the major economic trends will be downward pressure on cereal prices:
These are projected to stagnate until 2020 despite increased demands. This,
coupled with decreasing farm subsidies, will result in a need for greater efficiency at the

farm level.
2. Government is no longer the predominant player in food regulation
Vertical integration of the food chain has been accompanied by a declining role
for government and an increasing role for food retailers and the private sector. At the
same, time consumer demands - especially for "non-chemically contaminated food", are
expected to boost to some 15-20% the market share of organic food by 2020.
3. A potential concern associated with the increased production and movement of
livestock (largely swine and poultry) across the world is the transfer of epizootic diseases
from animals to humans. The increased trading in livestock and food crops has also
resulted in the creation of niche products in off-season markets. However, it also raises a
series of trade related questions on market access.
4. There is a trend to increasing urbanization in many countries as people are unwilling
to remain on the land and to continue to be involved in agricultural production.
Agriculture in general is declining in economic importance and hence in public opinion.
It is alarming to note that the number of students in agriculture faculties is declining
rapidly. The reduced numbers of people involved in agriculture will also be a driver for
increased mechanization of farming and raises a new challenge of how to find
technologies that are ecologically sustainable, particularly for developing countries.
5. Increasing public concern regarding food safety must be met with a massive education
programme. One thing that has become clear is that food safety and human health are
generally assigned higher priority than the environment in the public mind.
35
6. The medicalization of agriculture is expected to continue. Two examples that come to

mind include further investigating the use of nutriceuticals to improve diets and a better
understanding of the role of protective factors, found in certain foods such as brassicas, in
protecting against certain types of cancer.
CONCLUSIONS
Agriculture plays a pivotal role in the Indian economy. Although its contribution to gross
domestic product (GDP) is now around one sixth, it provides employment to 56% of the Indian
workforce. Also, the forward and backward linkage effects of agriculture growth have increased
the incomes in the non-agriculture sector. The growth of some commercial crops has significant
potential for promoting exports of agricultural commodities and bringing about faster
development of agro-based industries. Thus agriculture not only contributes to overall growth of
the economy but also reduces poverty by providing employment and food security to the
majority of the population in the country and thus it is the most inclusive growth sectors of the
Indian Economy. Hence we need to set our priorities right in the changing scenario. It is just not
India but the farming sector would be required to feed the world in the coming days.
REFERENCES
1. Agarwal A.N. - Indian Economy (Problems and Development and Planning), Wishwa
Prakashan.
2. Chengappa R. and Vinayak R. - 'Grain Drain' article published in India Today, 11 th June,
2007.
3. Dutt R. and K.P.M . Sundaram - Indian Economy.

4. Rana S.V.S. - Essentials of Ecology and Environmental Science, prentice Hall of India Pvt.
Ltd. New Delhi.
36
SUSTAINABLE IRRIGATION MANAGEMENTIN IN INDIA:

PROBLEMS AND PROSPECTS
Dr.D.Kamalavenia and R.Parvathamb
a
Associate Professor, PG and Research Department of Commerce, Vellalar College for Women
(Autonomous), Erode-12, Tamilnadu, India.
b
Assistant Professor, PG Department of Commerce (CS), Vellalar College for Women
(Autonomous), Erode-12, Tamilnadu State, India.
INTRODUCTION
From a nation dependent on food imports to feed its population, India today is not only
self--sufficient in grain production, but also has a substantial reserve. The progress made by
agriculture in the last four decades has been one of the biggest success stories of free India.
Agriculture and allied activities constitute the single largest contributor to the Gross Domestic
Product, almost 33% of it. Agriculture is the means of livelihood of about two--thirds of the
work force in the country.
This increase in agricultural production has been brought about by bringing additional
area under cultivation, extension of irrigation facilities, the use of improved high yielding variety
of seeds, better techniques evolved through agricultural research, water management, and plant
protection through judicious use of fertilizers, pesticides and cropping practices
Sustained, although much slower, agricultural growth in the 1990s reduced rural poverty

to 26.3 percent by 1999/00. Since then, however, the slowdown in agricultural growth has
become a major cause for concern. India‘s rice yields are one-third of China‘s and about half of
those in Vietnam and Indonesia. With the exception of sugarcane, potato and tea, the same is true
for most other agricultural commodities.
The Government of India places high priority on reducing poverty by raising agricultural
productivity. However, bold action from policymakers will be required to shift away from the
existing subsidy-based regime that is no longer sustainable, to build a solid foundation for a
highly productive, internationally competitive, and diversified agricultural sector.
PRIORITY AREAS FOR THE WORLD BANK SUPPORT
1. Enhancing agricultural productivity, competitiveness, and rural growth

 Creating a more productive, internationally competitive and diversified agricultural
sector would require a shift in public expenditures away from subsidies towards
productivity enhancing investments.
 Increase in multi-sectoral competition for water highlights the need to formulate water
policies and unbundle water resources management from irrigation service delivery.
 Rising incomes are fueling demand for higher-value fresh and processed agricultural
products in domestic markets and globally, which open new opportunities for
agricultural diversification to higher value products (e.g. horticulture, livestock), agro-
processing and related services.
37
2. Improving access to assets and sustainable natural resource use

 Finding win-win combinations for conservation and poverty reduction will be critical to
sustainable natural resource management.
 States can build on the growing consensus to reform land policy, particularly land
tenancy policy and land administration system.
 It would require improving the performance of regional rural banks and rural credit
cooperatives by enhancing regulatory oversight, removing government control and
ownership, and strengthening the legal framework for loan recovery and the use of land
as collateral.
3. Strengthening institutions for the poor and promoting rural livelihood

 State Government efforts in scaling up livelihood and community-driven development
approaches will be critical to build social capital in the poorest areas as well as to expand
savings mobilization, promote productive investments, income generating opportunities
and sustainable natural resource management.
 Improve the rural investment climate, facilitating the involvement of the private sector,
creating employment opportunities and linkages between farm and non-farm sectors.
IMPORTANCE OF IRRIGATION
Irrigation plays a vital role in agricultural development as it leads to desirable cropping
pattern, registers an increase in yield rates and better labour utilisation. Also, the success and
efficiency of other farm inputs largely depend on quantity, quality and timing of water supply,

the methods of its use and adequacy of control over it.
The rainfall of our country is dependent on the monsoons. Rainfall controls our agriculture. But
the agriculture of our country is said to be, "the gambling of the monsoon" as the monsoon
rainfalls are uncertain, irregular and uneven or unequal.So irrigation is essential for agriculture.
The following are the primary issues regarding irrigation in our country:
(1) About 80 per cent of the total annual rainfall of India occurs in four months, i.e. from mid-
June to mid-October. So it is essential to provide irrigation for production of crops etc, during the
rest of the eight months.
(2) The monsoons are uncertain. Hence irrigation is necessary to protect crops from drought as a
result of uncertain rainfall.
(3) It does not rain equally in all parts of the country and therefore irrigation is must for
agriculture in less rainfall areas.
(4) Soils of some areas are sandy and loamy and therefore porous for which a major portion of
rainwater sinks down very quickly and such soils can't retain water like the alluvial soil and the
black soil. That is why irrigation is essential for farming in the areas having, sandy and loamy
soils.
(5) As the rain-water flows down very quickly along the slopes of hillsides, irrigation is
imperative to grow crops in such areas.
(6) In order to grow food-crops and agricultural products in large quantities to feed the growing
millions, intensive farming and rotation of crops are essential. Extensive irrigation is, therefore,
necessary for more production.
38
TYPES OF IRRIGATION SYSTEMS

All the different sources of irrigation in India are divided into two major divisions; viz. Flow
irrigation and Lift irrigation.
The Irrigation Projects of India are classified into three types according to their capacity of
irrigation. They are:
1. Major Irrigation Projects,
2. Medium Irrigation Projects and
3. Minor Irrigation Projects.
Irrigations in India are carried on in three different ways according to their sources, such as (i)
by canals, (ii) by wells, and (iii) by tanks. Out of the total area under irrigation, 40 per cent are
irrigated by canals, 40 per cent by wells and 12 per cent by tanks. The rest 8 per cent of land are
irrigated by other methods.
1. Irrigation by Canals: This is the most convenient method of irrigation. About half of the total
area under irrigation by canals is situated in Punjab, Haryana, Uttar Pradesh and Andhra Pradesh.
It is easy to dig canals in these areas since the land is level and soil soft.
There are two types of canals; such as: perennial canals and inundation canals. Artificial
reservoirs are created by constructing annicuts. Barrages or dams across rivers for perennial
canals.

2. Irrigation by Wells: The rain-water sinks down easily in the areas where the soil is soft and
porous. So water is available at a lower depth when wells are dug and it helps irrigation.
Irrigation by wells is more expensive, so more profitable farming of vegetables is carried on in
those areas.
3. Irrigation by Tanks: Tank irrigation is the most feasible and widely practiced method of
irrigation. Where most of the tanks are small in size and built by individuals or groups of farmers
by raising bonds across seasonal streams.
Underground Water Resources: A huge quantity of water has been stored under the ground
since long. Now an organization named the Central Underground Water Board has been set up in
order to utilize this water. A map has been prepared by this organization after surveying all over
the country. This map shows the regions where underground water is easily available and at what
depth.
Nowadays pure drinking water is being supplied by deep bored tube wells in the rural areas
where pure drinking water is not available and in the coastal strip of Orissa having brined water.
Lift irrigation is being carried on by sinking deep bored tube wells in the areas having scarcity of
water for agriculture. Since people had not such idea regarding the underground water before
India attained independence, the underground water resources had not been developed there.
Multipurpose River-Valley Projects: Many multipurpose river valley projects have been devel-
oped in our country in order to utilize the vast water-resources of our rivers. Many purposes can
39
be solved by creating reservoirs by constructing strong dams and embankments or bonds in the
river beds. Flood control, irrigation, generation of hydro-electricity, navigation, soil
conservation, a forestation, pisciculture, water supply etc. have been the chief aims of these
multipurpose projects. So these projects have been turned as Multipurpose River-Valley Projects.
In addition to this, these projects have also been spots of tourist interest to attract tourists. Owing
to generation of hydro-electricity, power supply has been cheap and convenient and growth of
industry has been possible in our country.
EXPENDITURE ON IRRIGATION
The gross irrigated area, as a per cent of gross cropped area, has increased from 34 per cent in
1990-91 to 45.3 per cent in 2008-09. Nearly 80% of public investments have been diverted to
irrigation. India currently has an overall irrigation potential of 140 million hectares out of which
about 109 million hectares have been created and around 80 Mha utilised. The table below shows
the total expenditure by the Indian government on irrigation and flood control.
Table 1: Total Expenditure on Irrigation & Flood Control

(Rs in crores)
Major &
MI/MI & Total Plan
Plan period Medium Total Flood Control % on Irrigation
CAD Expenditure
projects
I (1951- 56) 376.2 65.6 441.8 13.2 1,960 22.54

II (1956-61) 380 161.6 541.6 48.1 4,672 11.59
III (1961-66) 576 443.1 1,019.1 82.1 8,577 11.89

Annual (1966-69) 429.8 560.9 990.7 42 6,625 15.04
VI (1980-85) 7,368.8 4,159.9 11,528.7 787 1,09,292 10.55
VII (1985-90) 11,107.3 7,626.8 18,734.1 941.6 2,18,730 8.56
Annual (1990-92) 5,459.2 3,649.5 9,108.7 460.6 1,23,120 7.4
VIII (1992-97) 21,071.9 13,885.3 34,957.2 1,691.7 4,83,060 7.59

IX (1997-02) 49,289 13,760 83,049 3,038 9,41,041 6.7
X (2002-07) 83,647 16,458.9 1,00,105.9 4,344.18 16,18,460 6.19
XI (2007-12)
1,65,350 46,350 2,11,700 20,100 36,44,718 5.81
(Projection)
* CAD: Command area development includes irrigation programmes.

Source: Govt.of India Ministry of Water Resources
It can be seen from the table No. 1 that the percentage of spending on irrigation with respect to
overall expenditure has gone down from 22.54% in 1951-56 to 6.19% in 2002-07. However, the
expenditure on irrigation projects has increased from Rs 376.2 crore in the First Plan to Rs 3,647
crore in the Tenth Plan. Since there is high variability of rainfall in India, there is an acute need
to conserve surface water. According to the Planning Commission, a total of about 225 billion
40
cubic meters (BCM) of surface storage capacity has been created till now. The demand gap could
be 250 BCM by 2050, and the burden on surface irrigation will be 150 BCM even with
groundwater provision.
DEVELOPMENT AND UTILIZATION OF IRRIGATION POTENTIAL

As per the reassessment of the Committee constituted by MoWR in May 1997, the currently
accepted figures of Ultimate Irrigation Potential (UIP) under the major and medium projects
sector is 58.47 MHa and Potential Created (PC) and utilized up to X Plan are 41.64 Mha and
33.74 respectively. The assessment of Ultimate Irrigation Potential needs to be periodically
reviewed to account for revision in scope, technological advancement, inter basin transfer of
water, induced recharging of ground water, etc.
The created irrigation potential in respect of major and medium projects increased from 9.72
mha in preplan period to 46.24 mha (tentative) including 4.60 MHa anticipated to be created
in XI plan. In the corresponding period the potential utilization has been from 9.70 mha period
during pre plan period to 35.10 mha (including 1.36 Mha anticipated during XI plan).
Table 2: The Plan‐Wise Potential Created and Utilization
Potential Created Potential Utilised
Plan

Major & Minor Total Major & Major Total
Medium Medium
S.W G.W Total S.W G.W Total
Upto 1951 Cumulative 9.70 6.40 6.50 12.90 22.6 9.70 6.40 6.50 12.90 22.60
I (1951-56) During 2.50 0.03 1.13 1.16 3.66 1.28 0.03 1.13 1.16 2.44
Cumulative 12.20 6.43 7.63 14.06 26.26 10.98 6.43 7.63 14.06 25.04
II(1956-61) During 2.13 0.02 0.67 0.69 2.82 2.07 0.02 0.67 0.69 2.76
Cumulative 14.33 6.45 8.30 14.75 29.08 13.05 6.45 8.30 14.75 27.80
III(1961-66) During 2.24 0.03 2.22 2.25 4.49 2.12 3.03 2.22 2.25 4.37
Cumulative 16.57 6.48 10.52 17.00 33.57 15.17 6.48 10.52 17 32.17
Annual During 1.53 0.02 1.98 2.00 3.53 1.58 0.02 1.98 2.00 3.58
(1966-69) Cumulative 18.10 6.50 12.50 19.00 37.10 16.75 6.50 12.50 19.00 35.75
IV(1969-74) During 2.60 0.50 4.00 4.50 7.10 1.64 0.50 4.00 4.50 6.14
Cumulative 20.70 7.00 16.50 23.50 44.20 18.39 7.00 16.50 23.50 41.89
V(1974-78) During 4.02 0.50 3.30 3.80 7.82 2.70 0.50 3.30 3.80 6.50
Cumulative 24.72 7.50 19.80 27.30 52.02 21.16 7.50 19.80 27.30 48.46
Annual During 1.89 0.50 2.20 2.70 1.59 1.48 0.50 2.20 2.70 4.18
(1978-80) Cumulative 26.61 8.00 22.00 30.00 56.61 22.64 8.00 22.00 30.00 52.64
VI(1980-85) During 1.09 1.70 5.82 7.52 8.61 0.93 1.01 4.24 5.25 6.18
Cumulative 27.70 9.70 27.82 37.52 65.22 23.57 9.01 26.24 35.25 58.82
VII(1985-90) During 2.22 1.29 7.80 9.09 11.31 1.90 0.96 6.91 7.87 9.77
Cumulative 29.92 10.90 35.62 46.52 76.44 25.47 9.97 33.15 43.12 68.59
Annual During 0.82 0.47 3.27 3.74 4.56 0.85 0.32 3.10 3.42 4.27
(1990-92) Cumulative 30.74 11.46 38.89 50.35 81.09 26.31 10.29 36.25 46.54 72.85
VIII (1992- During 2.21 1.05 1.91 2.96 5.17 2.13 0.78 1.45 2.23 4.36
41
97) Cumulative 32.95 12.51 40.80 53.31 86.26 28.44 11.07 37.7 48.77 77.21
IX (2002-07) During 4.10 1.09 2.50 3.59 7.69 2.57 0.37 0.85 1.22 3.79
Cumulative 37.05 13.60 43.30 56.90 93.95 31.01 11.44 38.55 49.99 81.00
X(2002-07) During 4.59 0.71 2.81 3.52 8.82 2.73 0.56 2.26 2.82 6.23
Cumulative 42.35 14.31 46.11 60.42 102.77 33.74 12.00 40.81 52.81 87.23
Source: Govt.of India Ministry of Water Resources
PROBLEMS OF IRRIGATION SECTOR

Despite its remarkable agricultural and micro economic contributions, the irrigation sector faces
many problems both from within and outside the sector. Problems now faced are not only
sectoral issues but economic within their ramifications, as well. Solution to the irrigation sector
problems will have a strong bearing on agricultural sustainability and economic stability.
Problems in Surface Irrigation

The surface irrigation projects would continue to play a stronger role. The weak physical,
financial and institutional foundation on which the irrigation sector is operating makes it
doubtful whether the sector can continue to deliver production, income, employment benefits at
the present level. Although, surface irrigation projects have brought prosperity, the projects
themselves have tended to remain unviable with the water rates covering less than 5 per cent of
Operation and Maintenance (O&M) costs. Water logging, salinity and alkalinity is one fall out of
poor management of the system and the others being distressed tail ender farmers. It is expected
that the present surface irrigation systems are woefully inefficient causing many environmental
and ecological problems. Nevertheless, if these resources are well-managed, better-planned and
optimally- and efficiently-utilized, the potential presently created would be adequate to meet the
future demand of irrigated agriculture without investing in new projects.

Problems in Groundwater
Although, the groundwater works, which are individually owned, have better efficiency and
productivity, the main problem is of developing an adequate and potent kit of policy instrument
that can enable policy makers to bring a modicum of order in its present chaotic development
under private initiatives. Free or highly subsidized availability of power has caused more damage
to groundwater. The urgent need, therefore, is to check pumping an overdraft of groundwater
keeping in view the groundwater dependent agricultural economy. Besides, declining water
levels, groundwater is also confronted with the problem of chemical quality. Capital intensive
technology available to elite and influential farmers has created iniquitous development and
emergence of informal water markets, thus treating water as a tradable commodity in absence of
effective legislation.
CHALLENGES
The new economic policy which underlines financial disciplines and market based approaches to
economic management and acceptance of WTO, which has initiated global agricultural trade
liberalization, has placed Indian agriculture amidst a host of challenges and opportunities. This
necessitates stipulating a 4.5 per cent growth rate against all time 3 per cent. This is possible, if
there is a higher productivity and diversification to high value farm production, which can
happen only through irrigation. The sector is posed with two main formidable challenges, one,
the green revolution which having shown high agricultural growth is now showing signs of
lethargy due to progressive exhaustion of technological potential and deterioration in natural
42
resources, and two, the land resource based agriculture is gradually declining due to land
degradation. Besides this, the other challenges are:
(1) Limitations on physical expansion of irrigation particularly in major river basins which is fast
approaching its ultimate potential;
(2) Competitive use of water from other sectors. The share of irrigation in the total water use is
expected to decline from 83 per cent to 73 per cent during next decade as a result of four fold
growth in non irrigational sectors;
(3) Fiscal constraint to expansion is also becoming increasingly binding. For instance, the share
of irrigation in the total Plan expenditure has come down from 22 per cent from the First Plan
(1951-1956) to 6.5 per cent in the Ninth Plan (1997-2002). Irrigation contributes significantly to
the revenue deficits of the States.
REASONS FOR UNDERDEVELOPMENT
Siltation of reservoirs and canals, lack of regular and proper repair and maintenance of the
irrigation infrastructure, inadequate allocation of resources for repair and maintenance, water-
intensive crops at the head reaches, not building canals, over development (beyond the carrying
capacity) of projects in a basin, water logging and salinization, diversion of water for non-

irrigation uses, increasing exploitation of groundwater. In some cases, the additional area added
by new projects is not reflected in the figures as the area irrigated by older projects is declining
on account of the neglect outlined earlier.
Indeed the World Bank‘s 2005 report, ―India‘s Water Economy: Bracing for a Turbulent
Future‖, showed that annual financial requirement for maintenance of India‘s irrigation
infrastructure (which is largest in the world) is Rs 17,000 crore but less than 10 per cent of that
amount is available and most of it does not result in physical maintenance of the infrastructure.
In some over-developed basins, the new projects are like zero sum games, since they would be
taking away water from some of the downstream areas. Optimistic hydrological projections,
which are almost universal in big irrigation projects, would mean that, in any case, there will not
be sufficient water in the basin to provide the projected benefits.
STRATEGIES FOR COPING UP WITH THESE PROBLEMS

To achieve the sustained irrigation development the following strategies are needed:
 Increasing the effective irrigation area through timely renovation and modernization
of the irrigation and drainage systems, including reclamation of waterlogged and
salinised irrigated lands.
 Per capita dam storage capacity in India is one of the lowest in the world (200 m3/capita
as compared to 5000 m3 in the USA, 1000 m3 in China, and around 900 m3 in South
43
Africa) and needs to be substantially enhanced to offset the seasonal and long term
resource availability fluctuations and make efficient use of the available resources.
 Inter-basin transfers of surplus water are most likely inevitable. The Government of
India has already developed a National Integrated Water Development Plan and National River
Linking Project. This calls for the transfer of water from relatively water rich eastern (and
possibly northern) Himalayan rivers to the deficit southern basins.
 Enhance water productivity at all levels through field, farm, and command area and
basin level improvements, reducing non beneficial evaporation losses, breeding drought/ flood
tolerant and water efficient cultivars and community participation in resource management shall
help in demand management of the resources.
 Initiate effective steps for private partnership in distribution and management of water
systems at all levels for irrigation, and domestic and industrial supplies. Price of water supplies
must indicate its scarcity value and subsidies (if any) should be targeted to the vulnerable
sections of the society.
MICRO IRRIGATION
To address the judicious and improved methods/technologies for harnessing maximum benefits

from available water resources to enhance productivity without affecting soil health, a scheme on
Micro Irrigation was launched during the year 2005‐06 and has been up scaled to be
implemented as National Mission on Micro Irrigation (NMMI) during XI Plan.
 NMMI is being implemented by the Ministry of Agriculture and Micro Irrigation

Technologies are being promoted for agriculture/horticulture development. As per
recommendation of the Task Force constituted by Ministry of Agriculture, there is a
potential of 69 Mha. (27 Mha under drip and 42 Mha under sprinkler) to be achieved
under Micro Irrigation.
 During XI plan, an area of 22.77 lakh hectare has been covered during XI plan till
March, 2011 under this scheme and an amount of B 2756.43 crore has been released to
the States. An area of about 12.40 lakh hectare (46.45%) and 13.96 lakh hectare
(53.55%) have been covered under drip and sprinkler irrigation during the period from
2005 to 2011.
 Surface / gravity irrigation needs more water in compared to micro irrigation and leads to
water accumulation of excess water in absence of proper drainage arrangement. Yields of
crop are better in micro irrigation in addition to the saving of water. Water saving in
various crops from sprinkler irrigation ranges from 16% to 69% over the traditional
method and increase in crop yield from 3% to 57% whereas in drip water saving range is
44
5% to 68% and yield increase in crop is 10% to 50% ( Report of Sub‐Group II on

―Efficient Utilization of Existing Irrigation Facilities‖,MOWR, December, 2008).
 Although, it involves more O&M cost for energy charges as compared to surface
irrigation, micro irrigation is more efficient system to increase water use efficiency.
 In addition to water saving, micro irrigation results in enhanced growth & yield, saving
labour & energy, flexibility in operation etc. Micro Irrigation is being implemented
through drip or sprinkler irrigation systems depending upon the crop and agro climatic
conditions.
 In Sprinkler Irrigation, water is discharged under pressure in the air through a set of
nozzles attached to a network of high density polyethylene (HDP) pipes, simulating
rainfall. These systems are suitable for irrigating crops where the plant density is very
high. Sprinkler Irrigation Systems may be portable, semi‐permanent and large volume
sprinkler.
 Drip Irrigation involves technology for irrigating plants at the root zone through emitters
fitted on a network of pipes (mains, sub‐mains and laterals). At present, central
assistance is being provided under CADWM Programme for development of
infrastructure to facilitate use of sprinkler/drip irrigation systems as an alternative to
construction of field channels. The assistance under this item will be limited to
construction of stilling tank, pump house and laying of conveyance pipes up to farmers‘
fields. The cost norms as applicable for OFD works will also be applicable for such

works.
Micro‐irrigation needs to be included in CADWM programme as a basic component so as to put
all measures related with ensuring water use efficiencies in irrigation projects together.
CHECK DAMS - A WATER HARVESTING TECHNIQUE

Water has emerged as one of the most important commodities of the 21st century. Prior
to 1900, only 40 reservoirs had been built that held total volumes greater than 25 billion gallons.
Global water use has increased six fold during the last century, and policymakers and politicians
have met this increasing demand by building larger dams. Can big dams solve chronic water
shortages, poverty, and food insecurity? Proponents argue that bigger dams are better since they
reduce dependency on rainfall, increase irrigation, reduce flooding, and supply hydropower.
However, opponents argue that dams cause ecological damage. Evidence from India has shown
that a more sustainable solution is to build numerous check dams-small barriers using stones,
cement, and concrete built across the direction of water flow on rivers to harvest rainwater in
villages. Check dams introduce the pressing issues of water management in India emphasizing
eco-friendly development.
"Check-dams" are small barriers built across the direction of water flow on shallow rivers
and streams for the purpose of water harvesting. The small dams retain excess water flow during
monsoon rains in a small catchment area behind the structure. Pressure created in the catchment
area helps force the impounded water into the ground. The major environmental benefit is the
replenishment of nearby groundwater reserves and wells. The water entrapped by the dam,
45
surface and subsurface, is primarily intended for use in irrigation during the monsoon and later
during the dry season, but can also be used for livestock and domestic needs.
Why Check dams?

 Check dams generally require less operation and maintenance compared to surface irrigation
projects.
 Check dams are low weirs without canals off-taking, but they provide facility for Lift Irrigation
and for lifting from wells recharged in the surrounding area.
 Check dams are therefore the most effective tool for water conservation at the minimum
investment and minimum maintenance and operational cost.
 They act as ground water recharge means and they offer facility of lift irrigation in the
surrounding directly from the reservoir or from the wells recharged in the surroundings. About 7
wells in the surrounding are recharged by each check dam. 10 ha. of land is benefited by each
check dam.
 Check dams do not require land acquisition and hence most of the legal complications are
avoided in the whole process.
Moreover the advantages are made available to the beneficiaries instantly. Because of low
cost of check dams, poor farmers can also participate.
The story of Re 1 and a dam ‘doctor’

Anil Joshi, an Ayurveda doctor in Fatehgarh village in Madhya Pradesh- collected one rupee
each from one lakh people and constructed a check dam across a local seasonal river called
Somli. Going on to repeat it across eleven locations, he is now a full-time water conservationist.

With a dream to build 100 such check dams in nearby villages, constantly experiencing drought
conditions. One premise of the green economy (World Environment Day 2012 theme) is social
inclusion and here is an economically inventive version of that possibility, where the initiative
remains human.
When Anil Joshi, did it, the rest of India wondered why not they. It's time the rest of the country
asked the same question.
IRRIGATION MANAGEMENT
The overall management tier is formed by the Water Resources Departments in the states
who have the necessary technological and financial wherewithal to manage the large structure
and networks associated with the MMI projects in the state. The departments are also assisted at
the central level by the Central Water Commission.
As has been elucidated earlier, there are a sizeable number of projects in the country
which are already in operation for the last 25 years or more. It has been observed that with the
change in demands and developments in the command areas, the delivery needs of the projects
have also changed. The departments are therefore, being called upon to not only create new
assets but also to maintain and manage the old existing assets. Thus, the challenges of
technological nature as well as social and financial nature have to be addressed. The Working
Group has laid special emphasis on the Extension, Renovation and Modernisation of the existing
projects (ERM projects) before setting up the grass root level mechanisms for on farm
management and improvement of the water use efficiency. For this purpose, specific challenges
have to be addressed in the areas of construction planning and techniques to be adopted. Also,
46
for improvement in the operational area, new technologies like automation techniques will also
have to be integrated in the institutional experience base.
Even though the MMI projects are treated as a prime responsibility of the Water
Resources Departments, the role of the associated departments like agriculture, social welfare,
Cooperative affairs and economics and statistics is equally important to necessitate reforms
commensurate with the needs of the individual departments. The role of Agriculture Extension
services in the field works has been decreasing over the years due to lack of manpower and other
factors. It is necessary that the agriculture extension services are introduced in a mission mode
into the management of the MMI projects.
Focused research and analysis of the status of irrigation projects is also needed for
meeting the goal of improved management of the available projects as well in the planning of
new projects. The research institutions like WALMI need a re‐look and additional resources so
that the desired informed decisions can be supported by the applied research through these
institutions. Additionally, studies by expert institutions are also required for addressing macro
level problems. Supporting such institutions for well directed research and development is also
needed. Adequate financial resources need be allocated through which the in‐house expertise in
these institutions is also built up. MMI projects implementation suffers delays largely due to
problems of land acquisition and resistance due to insufficient consultations with the
beneficiaries/ affected personnel. Most of these areas are in purview of a multitude of
departments at the state government level.
It is necessary to establish suitable working mechanisms which can cross the
departmental boundaries with minimum delay. Thus, it is recommended that the higher level

management of the MMI projects need be more inter‐disciplinary nature with establishment of a
collective decision and policy making process. It is further recommended by the working group
that the capacity building of the water resources departments in terms of manpower as well as
skill sets is the need of the hour and adequate resources may be provided for this purpose.
CONCLUSION
The design and performance of public irrigation system still follow some principles, which are
not any more in tune with the current and future needs of the farmers and the country. Most
schemes do not operate as planned. It would be a mistake to rehabilitate existing schemes or
design new ones without using more advanced design principles and co-managing these with the
private institutions and farmers. Many changes in the present concepts of water supplies are
overdue particularly in regard to:
a) Increasing irrigation intensity;
b) Recycling surface irrigation water;
c) Developing conjunctive use;
d) Improving canal efficiency;
e) Introducing dynamic regulations;
f) Transferring completed works to farmers; and
g) Improving water management at chak level and ensuring simultaneous completion of on
farm development works.
47
To sum up, to fulfill the tasks ahead, would entail:

1) Reforming the State Irrigation Department by putting them on a sound financial basis and
improving their linkages with the agricultural institutions;
2) Fastening the creation of Water Users Association (WUA) and turnover of irrigation
projects for effective management, O & M care of the minor and distribution canals;
3) Establishing the water rights; and
4) Rehabilitating and modernizing the irrigation systems.
Improving irrigation-financing would entail upon making the Irrigation Departments

autonomous and self financing through increased water charges, improving collection rates and
developing instruments to capture private sector investments in development and management.
The thrust of the new strategy would be on integrated approach to irrigation performance and
agricultural growth, where reforming both the irrigation system and the irrigated agriculture
interface would be the primary vehicle for sustainable agricultural growth.
REFERENCES
[1] GOVERNMENT OF INDIA MINISTRY OF WATER RESOURCES Report of the

Working Group On Major & Medium Irrigation and Command Area Development For
the XII Five Year Plan (2012-2017) New Delhi, November 2011.

[2] Satya Sundaram I. (1997): Rural Development, Himalaya Publishing House, Mumbai.
[3] http://www.tradingeconomics.com/india/agricultural-irrigated-land-percent-of-total-
agricultural-land-wb-data.html
[4] http://farmersforum.in/agriculture-farming-india/indias-irrigation-challenges-
underperforming-dams-zero-canal-growth/
[5] http://nrlp.iwmi.org/PDocs/DReports/Phase_01/12.%20Water%20Savings%20Technolog
ies%20-%20Narayanmoorthy.pdf
[6] http://sulbhaskhanna.com/check%20dams1.pdf
[7] http://forbesindia.com/
[8] http://in.news.yahoo.com/blogs/purplecorner/-1-man--1-rupee--1-check-dam.html
[9] http://indiatoday.intoday.in/story/things-that-make-india-proud-check-
dams/1/218910.html
[10] http://www.indianexpress.com/news/space-to-ground-checks-for-sonbhadra-s-
check-dams/689734
[11] http://articles.timesofindia.indiatimes.com/2012-11-
05/nashik/34926701_1_check-dams-villagers-taluka
48
RURAL INFRASTRUCTURE AND AGRICULTURAL

DEVELOPMENT
Mrs.M.Premaa
a
Assistant Professor, Department of Commerce (CA), Vellalar College for women,
Thindal, Erode.
ABSTRACT: Agricultural development is essential for economic growth, rural development,

and poverty alleviation in low-income developing countries. Productivity increase in agriculture
is an effective driver of economic growth and poverty reduction both within and outside
agricultural sectors. Such productivity increase depends on good rural infrastructure, well
functioning domestic markets, appropriate institutions, and access to appropriate technology.
While the state of rural infrastructure varies widely among developing countries, most lower-
income developing countries suffer severe rural infrastructure deficiencies. Deficiencies in
transportation, energy, telecommunication, and related infrastructure translate into poorly
functioning domestic markets with little spatial and temporal integration, low price transmission,
and weak international competitiveness.
Rural infrastructure development is a complex phenomena, due to the many attributes of
infrastructure that make it difficult for individuals to design, construct, operate and maintain
these services effectively and efficiently. Some problems stem simply from the fact that
infrastructure facilities by nature have potentially long, useful lives during which the
circumstances of users may change. Thus, decisions concerning their initial design and

subsequent maintenance are extremely difficult to perfect. Even greater problems arise as
sustainability of the bulk of the rural infrastructure in the developing world is influenced greatly
by public sector decision-making.
INTRODUCTION
The role of infrastructure is crucial for agricultural, industrial and overall economic
development. It also, incidentally, provides, basic amenities, which improve the quality of life.
However, infrastructure projects involve huge initial investments, long gestation periods, high
incremental capital-output ratio, high risk and low rate of return on investment and non-rivalry in
nature. All these factors make private sector entry difficult. As a result of these, infrastructure
services, world over, are generally provided by the public sector. With greater demand, changing
technology, increasing complexity for financing the infrastructure projects and budgetary
constraints, the public sector is finding it increasingly difficult to discharge efficiently its role as
a provider of basic infrastructure services.
Agricultural development is essential for economic growth, rural development, and
poverty alleviation in low-income developing countries. Productivity increase in agriculture is an
effective driver of economic growth and poverty reduction both within and outside agricultural
sectors. Such productivity increase depends on good rural infrastructure, well functioning
domestic markets, appropriate institutions, and access to appropriate technology.
49
Rural infrastructure development is a complex phenomena, due to the many attributes of

infrastructure that make it difficult for individuals to design, construct, operate and maintain
these services effectively and efficiently. Some problems stem simply from the fact that
infrastructure facilities by nature have potentially long, useful lives during which the
circumstances of users may change.
CONCEPT OF RURAL INFRASTRUCTURE
Infrastructures are those underlying or basic forms of physical, social and institutional
capital which enhances rural communities‘ production and consumption activities and ultimately
the improved wellbeing. Rural infrastructures constitute the necessary components or ingredients
for motivating rural residents to be more productive and achieve relative self-reliance.
Infrastructural facilities, refers to those basic services without which primary, secondary and
tertiary productive activities cannot function. In other words, infrastructural facilities are element
in the package of basic needs, which a community would like to procure for better living. Basic
infrastructure services are both final household consumption items and intermediate inputs into
productivity. Almost a third and half of all infrastructure services go to household consumption,
while the rest is for production.
TYPES OF INFRSTRUCTURES
(1) Physical Infrastructures - are composed of transformation facilities consisting of roads,
bridges and railways, storage facilities which made up of warehouse and silos; irrigation and

water resources development composed of dams, irrigation, water facilities, drainage, soil
conservation facilities and other forms of processing facilities.
(2) Social Infrastructures - are also divided into different forms, which include health and
medical facilities. These consist of hospitals, dispensaries, maternity and health centres.
Educational components of infrastructure consist of primary, secondary and technical schools,
vocational and adult educational facilities. While rural utilities consist of a wide range of welfare
facilities such as water supply, electricity, community centres, fire and security services.
(3) Institutional Infrastructure - the components of institutional aspects of infrastructure
include cooperative societies, farmers‘ unions, community development programmes/projects
through self-help efforts, financial institutions like banks, post offices, agricultural research
facilities made up of research sub-stations, experimental farms, demonstration plots, agricultural
extension and training services, post and telecommunication facilities.
Rural infrastructural development could imply the desirability of overcoming deprivation
and low quality of rural life. It should be noted that improvement of the status of rural residents
is greatly influenced by the type and quality of infrastructure provided there with regular
maintenance.
INFRASTRUCTURE FOR AGRICULTURE AND RURAL DEVELOPMENT

The models of development which focus on agriculture also bring about the role that
infrastructure play in agricultural development in particular. The spread of technology in
agriculture depends critically on both physical and institutional infrastructure. It is also indicated
that infrastructure plays a strategic role in producing large multiplier effects in the economy with
50
agricultural growth. Rural infrastructure leads to agricultural expansion by increasing yields,

farmers‘ access to markets and availability of institutional finance. The kind of infrastructure put
in place also determines whether growth does all that it can to reduce poverty. Most of the poor
are in rural areas, and the growth of farm productivity and non-farm rural employment is linked
closely to infrastructure provision.
The importance of infrastructure in agriculture and rural development is well
documented. It is estimated that 15 percent of crop produce is lost between the farm gate and the
consumer because of poor roads and inappropriate storage facilities alone, adversely influencing
the income of farmers. Strengthening rural infrastructure can help to lower production costs
which can further augment agricultural output and income for rural farming community. Rural
infrastructure has its impact on attitudes and values of rural households as well. The most
profound effect of infrastructure development could be on the values of rural households.
Development of transport and communication infrastructure enhances the mobility of people and
information through reduction in cost and time. The resulting increase in interaction contributes
to changes in attitudes and human capital development.
Rural infrastructure plays a key role in reaching the large mass of rural poor. When rural
infrastructure has deteriorated or is nonexistent, the cost of marketing farm produce can be
prohibitive for poor farmers. Poor rural infrastructure also limits the ability of traders to travel to
and communicate with remote farming areas, limiting market access from these areas and
eliminating competition for their produce.
IMPORTANCE OF AGRICULTURAL AND RURAL DEVELOPMENT

 Rural and agricultural development and equitable distribution of the benefits of

economic growth are crucial for the global reduction of poverty and hunger.
Numerous studies have provided evidence that the impact of economic growth on
reducing hunger and poverty depends as much on the nature of the growth (e.g.
industrial or rural economy based) as on its scale and speed.
 Agricultural and rural development is necessary to increase agricultural
production in order to provide sufficient food for an expanding population in
food deficient regions in developing countries.
 The rural economy plays an important role with regard to employment, since the
economic growth in urban centres is too slow to generate sufficient employment
to absorb the migrated labour force, particularly in transition countries. The
contribution of agriculture is obvious in rural areas where it is one of the major
economic activities, although small semi-urban centres play a major role in the
economic growth of rural areas.
 Agricultural activities can be crucial in the preservation of natural resources. By
maintaining agricultural and forestry activities, environmental risks can be
reduced and direct economic damage caused by avalanches, landslides, forest
fires, etc. can be prevented.
51
ROLES PLAYED BY AGRICULTURAL INFRASTRUCTURE IN REGIONAL

DEVELOPMENT
1. Infrastructure Increases Agricultural Production and Productivity

The infrastructure in the agricultural sector enhances the ‗comparative advantages‘ of that
region in which the infrastructural investment is made. When the region gains comparative
advantage in the agricultural activities, the net result is increase in the production and
productivity of various agricultural goods and services in general. The increased level of
production and productivity results in a shift in the supply curve upwards, which has its positive
implications on the price factor depending on the nature of the elasticity of demand for the
commodity under consideration.
2. Infrastructure Reduces Cost of Production

Development of agricultural infrastructure in a particular region not only enhances the
agricultural production and productivity but in many cases, leads to reduce the marginal cost of
production. It should be noted that the transaction cost .That generally falls outside the cost of
input prices −can be one of the major components of the total cost of production in the
agricultural sector and the infrastructure plays a dominant role in reducing the transaction cost.
3. Infrastructure Increases the Regional Value

An important benefit derived from the agricultural infrastructure is that it helps to
increase the level of value added in the region. Increased level of agricultural infrastructure in a
particular region would lead to extend investment in allied sectors which can produce high value

added products. The increased level of capital formation in a region due to the availability of
agricultural infrastructure leads to derived demand for the investment in the industries that
produce value added commodities.
4. Infrastructure and the Social Benefits

Provision of initial level of agricultural infrastructure or enhancement of the existing one
may lead to a different kind of cropping pattern from the existing one that would generate some
indirect positive benefits that may be called social benefits. These benefits are enjoyed not only
by the regional economic activities but also by activities beyond the administrative and political
boundaries of the region.
5. Infrastructure and the Economies of Scale

Some types of infrastructure may result in increased economies of scale that would
increase the agricultural income. The economies of scale is realised when the cost of production
of a particular firm declines due to external advantages. Provision of one particular infrastructure
for a specific objective may result in satisfying multiple objectives thereby increasing the
economies of scale in the production activities. For example, rural electrification for providing
electricity for the agricultural sector or rural road network may attract small-scale industrial units
that also consume electricity and road in the production process.
52
6. Infrastructure and Accelerator Effects

It should be noted that a particular type of agricultural infrastructure in one region will
have its multiplier as well as accelerated effects in other areas, especially in urban centres. For
example, additional area of land can be brought under cultivation due to construction of an
irrigation dam in a particular region. This would lead to increased consumption of fertiliser
which would either warrant expansion of the reserved capacity in the fertiliser industry or would
require investment in the new fertilizer units in urban areas.
7. Infrastructure and Increased Welfare of Producers and Consumers

Certain types of agricultural infrastructure enhance improvements in both producers as
well as consumer surplus. Increase in the number of regulated market committees, increased
availability of banking operations in rural areas, increased availability of transportation facilities,
etc prevent the middle-men and the money lenders from appropriating a substantial amount of
producer and consumer surplus. It should be noted that the welfare of the producers and the
consumers improves from the fact that increased infrastructural facility brings producers and
consumers to one place where producer could get a higher price for his products and consumers
could pay lower price for the same product.
8. Infrastructure and Reduction in Price Oscillation

Another form of loss of producer and consumer surplus is caused by the oscillation in the
price of the agricultural commodities. When there is a supply shortage and the demand for the
commodity being constant, the producer/seller will charge a price equivalent to the .quasi-rent.

thereby converting a considerable amount of consumer surplus into profit. When there is an
excess supply of the same commodity, the market becomes a buyer‘s market and the price paid
by the consumers would be sub-optimal. The price oscillation in this case is attributed mainly to
the information asymmetry existing in the market and once adequate amount of investment is
made in the communication infrastructure, then this would facilitate a long-term forecasting in
the supply and demand factors thereby eliminating the price oscillation.
RURAL INFRASTRUCTURE AND INTERNATIONAL COMPETITIVENESS

The potential benefits of trade liberalization and globalization in a developing economy
like India where majority of the population lives in rural areas and agriculture still plays a n
important role can‘t be obtained without making significant investments in rural infrastructure
and related institutions such as roads, transportation, and market institutions. It will be only after
that the low income developing countries and low income communities will be fully integrated
into the process of economic globalization. China‘s recent experience is a burning example in
this direction. During the reform period the dualistic character of China has been further
strengthened with a large share of rural population living in remote areas with meager
infrastructure facilities has further fallen into poverty whereas people in urban areas and rural
areas with good infrastructure facilities have been benefited with the opening of the economy by
generating more trade. Such a development is likely to create social instability in the long run.
Hence, it can easily be said that one of the key determinants of international competitiveness
would be the availability of adequate and efficient domestic infrastructure. Better domestic
infrastructure could contribute to international competitiveness through at least three channels:
53
(1) Improving price competitiveness; (2) improving non-price competitiveness; and (3)
attracting foreign direct investments (FDI).
CONCLUSION
Realizing that rural infrastructure is basic to agricultural development of any nation; this
paper has attempted a discussion on the concept of infrastructure and the importance or
contribution of rural infrastructure to the development of agriculture in India. Infrastructure is
central for enhancing productivity and improving access to markets, reduces investment related
risks among farmers and insures employment for the poor.
Infrastructure development has a key role to play in both economic growth and poverty
reduct ion. The infrastructure supply and services are part icularl y poor in rural
areas, although urban infrastructure is also under pressure. A massive investment campaign for
the construction of new rural infrastructure and maintenance of existing infrastructure in low
income developing countries is long overdue. Wit ho ut such a campaign, the many
plans, goals, and targets including the Poverty Reduction Strategy Papers, the Millenniu m
Development Goals, and many other declarations will not be achieved. Many of the
components for rapid economic growth and povert y reduct ion in India are already in
place and t he transformat ion of the lives of millions seems within reach. Yet there are
miles to go.
54

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International Research Journal of Agriculture and Rural Development

Vol2. No 1.June 2013, e ISSN: 2319 – 331X

International Research Journal of Agriculture and Rural Development

International Research Journal of Agriculture and Rural Development - IRJARD

Published by Non Olympic Times

Performance of Self Help Groups under Micro-finance Programme

Rashid Rasheed Wania and Dr. Imtiyaz-ul-Haqb

International Research Journal of Agriculture and Rural Development - IRJARD

Swarnajayanti Gram Swarozgar Yojana (SGSY) is one of such micro-finance programme.

International Research Journal of Agriculture and Rural Development - IRJARD

Objective of the Study

Data and Methodology

1. RESULTS AND DISCUSSION

1.1 Performance of 20 SHGs on indicators 1 to 5

International Research Journal of Agriculture and Rural Development - IRJARD

Table-1; Maturity Index

International Research Journal of Agriculture and Rural Development - IRJARD

1.2 Performance on indicators 6 to10

International Research Journal of Agriculture and Rural Development - IRJARD

Table-2; Maturity Index

International Research Journal of Agriculture and Rural Development - IRJARD

1.3 Performance of 20 SHGs on indicators 11 to 15

International Research Journal of Agriculture and Rural Development - IRJARD

Table 3: Maturity Index

Source: Field Survey

International Research Journal of Agriculture and Rural Development - IRJARD

1.4 Performance of 20 SHGs on indicators 16 to 20

International Research Journal of Agriculture and Rural Development - IRJARD

Table-4; Maturity Index

Source; Field Survey

International Research Journal of Agriculture and Rural Development - IRJARD

1.5 Overall performance

Source; Field Survey

International Research Journal of Agriculture and Rural Development - IRJARD

International Research Journal of Agriculture and Rural Development - IRJARD

International Research Journal of Agriculture and Rural Development - IRJARD

Agricultural and Rural Development in India

Dr.S.POONGODIa AND Dr.S.SARAVANAMBIGADEVIb

The Paradox and Challenges of Indian Agriculture

International Research Journal of Agriculture and Rural Development - IRJARD

1. Enhancing Pro-Poor Rural and Agricultural

International Research Journal of Agriculture and Rural Development - IRJARD

Investing in appropriate institutions is as important as investing in agricultural R&D and

2. Reforms with a Human Face:

International Research Journal of Agriculture and Rural Development - IRJARD

International Research Journal of Agriculture and Rural Development - IRJARD

International Research Journal of Agriculture and Rural Development - IRJARD

4. Toward High-Value Agriculture

Important challenges will need to be overcome.

International Research Journal of Agriculture and Rural Development - IRJARD

5. Trade and Market Policy Reforms

International Research Journal of Agriculture and Rural Development - IRJARD

International Research Journal of Agriculture and Rural Development - IRJARD

International Research Journal of Agriculture and Rural Development - IRJARD

Agriculture & Rural Development

Keywords: Agriculture, Employment, Human resource.

International Research Journal of Agriculture and Rural Development - IRJARD

ISSUES AND CHALLENGES

Poor composition of public expenditures

Inequitable allocation of water

Deteriorating irrigation infrastructure

International Research Journal of Agriculture and Rural Development - IRJARD

Computerization of land records has brought to light institutional weaknesses: State