Rural development is the process of improving the quality of life and economic well-being of people living in rural areas. According to 2011 Census 68.84% of population lives in villages. The backwardness of the rural sector would be a major impediment to the overall progress of the economy. India is predominately an agricultural country and farming is their main occupation. According to 2011 Agricultural Census of India, an estimated 61.5% dependent on agriculture. Technical developments in field of agriculture have increased the gap between the rich and poor, as the better off farmers adopted modern farm technology to a greater extent than the small farmers. The all India Rural Credit Review Committee in its report warned “If the fruits of development continue to be denied to the large sections of rural community, while prosperity accrues to some, the tensions social and economic may not only upset the process of orderly and peaceful change in the rural economy but even frustrate the national affords to set up agricultural production. ’’ Report of the All India Rural Credit Committee, New Delhi, 2003 has rightly pointed out that a purely agricultural country remains backward even in respect of agriculture. Most of the labour force in India depends on agriculture, not because it is remunerative but because there are no alternative employment opportunities. This is a major cause for the backwardness of Indian agriculture. A part of the labour force now engaged in agriculture needs to be shifted to non-agricultural occupations. Until the 1970s, rural development was synonymous with agricultural development and hence focused on increasing agricultural production. Today, Inclusive rural development is more specific concept than the concept of rural development of earlier, in broader terms, inclusive rural development is about improving the quality of life of all rural people.

Why was there a need of government intervention in the agriculture market system post independence era?

To create orderly and transparent marketing conditions

Prior to independence, farmers, while selling their produce to traders, suffered from faulty weighing and manipulation of accounts. Farmers who did not have the required information on prices prevailing in markets were often forced to sell at low prices. They also did not have proper storage facilities to keep back their produce for selling later at a better price.Therefore, government intervention became necessary to regulate the activities of the private traders.

Four such measures were initiated to improve the marketing aspect by the government. The first step was regulation of markets to create orderly and transparent marketing conditions. By and large, this policy benefited farmers as well as consumers. Second component is provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storages and processing units.Cooperative marketing, in realising fair prices for farmers’ products, is the third aspect of government initiative. The fourth element is the policy instruments like (i) assurance of minimum support prices (MSP) for agricultural products (ii) maintenance of buffer stocks of wheat and rice by Food Corporation of India and (iii) distribution of food grains and sugar through PDS.