What is Rural and Urban?

The definition of urban area adopted is as follows: (a) All statutory places with a municipality, corporation, cantonment board or notified town area committee, etc. (b) A place satisfying the following three criteria simultaneously: a minimum population of 5,000; at least 5 per cent of male wor!ing population engaged in non"agricultural pursuits; and a density of population of at least #00 per s$. !m. (%,000 per s$. mile)

&ural areas are characteri'ed by a more personal and intimate web of social relationships. (rom a re)iew of definitions of *rural+ fi)e dimensions can be identified: (i) negati)e, i.e. not urban; (ii) low population density; (iii) e,tensi)e land use; (i)) primary economic acti)ity and employment; and ()) community cohesion and go)ernance. &ural" urban disparities, particularly in post"colonial countries, ha)e for long been one of the causes of concern for the policyma!ers. -any in rural .ndia lac! access to education, nutrition, health care, sanitation, land and other assets and they are trapped into po)erty. As 0 percent of the country+s population mainly in rural areas lac! access to primary health care the worst affected is the elderly, young women and children. -a/or en)ironmental issues in rural areas are deforestation, soil erosion, o)ergra'ing, desertification, and water pollution from runoff of agricultural pesticides. .n urban areas there are issues of water pollution from sewage and air pollution from industrial effluents and )ehicle emissions. .ndia is also prone to natural disasters such as droughts, flash floods, se)ere thunderstorms and earth$ua!es. Link between rural and urban development There is a lin!age between the rural and urban de)elopment. These lin!ages matter because rural and urban li)elihoods are interconnected economically, financially, and socially. (rom a rural perspecti)e, most farmers depend on urban mar!ets to secure their

li)elihoods. &ural households also depend on urban centers or small towns for )arious ser)ices (e.g., hospitals, ban!s, and go)ernment offices) and for the pro)ision of )arious pri)ate and public goods. -oreo)er, the rural sector benefits from remittances sent by urban"based family members. 0i!ewise, urban areas are lin!ed to the rural sector through se)eral channels. (or e,ample, )arious urban businesses and enterprises depend on rural demand for their goods and ser)ices. They also rely on rural areas for the supply of raw materials. 1rban consumers, on the other hand, benefit from cheap and sustained food supply from rural areas. (urthermore, many poor urban households partly depend on rural acti)ities (e.g., farming) for their li)elihoods. The rural sector can also act as a buffer from the impact of macroeconomic shoc!s on the urban economy. 0in!s between the rural and urban sectors also include flows of information, such as mar!ets and employment opportunities, as well as flows of people mo)ing between rural and urban centers on a temporary or permanent basis. 2e)elopment policies that facilitate these rural"urban lin!ages can promote economic growth and po)erty reduction. Consequences of Urban- iased !olicies a. (irst, these policies lead to larger gaps between rural and urban areas in terms of many de)elopment indicators, such as education, health, nutrition, per capita income, and po)erty. b. 3econd, rising ine$uality may lead to tensions that constrain the prospects for future growth through a )ariety of social, political, and economic mechanisms. rid"in" the Rural-Urban #ncome $ap Today #. percent of the population li)es in rural areas and 4#.5 percent inhabit urban areas. The most compelling reason for eliminating the rural"urban income gap is to impro)e economic efficiency. The disparity between the two sectors is both a potential source of social and political instability and an important indicator of economic inefficiency. The cost of urban"biased inter)entions lies in the inefficiency of misallocating labor and other factors of production across the sectors, and these inter)entions may impede 6hina+s sustained growth in the long run. Although policies that fa)or urban residents may be needed in the short run to o)ercome interest groups and to ad)ance economic reforms, the long"term ob/ecti)e of the go)ernment should be to promote the de)elopment of competiti)e factor mar!ets, which implies the elimination of urban biased institutions and policies. .t is well documented by economists that when the income gap between rural and urban sectors is large, labor mo)ements to cities or capital in)estments to rural regions may ha)e immediate producti)ity effects.

There are two sets of factors that ha)e caused the e,isting rural" urban income gap. a. The first set is )arious inter)entions in the factor mar!ets, which lead to distorted labor and capital concentrations across rural and urban regions. 7ne such inter)ention is the restriction of labor mobility, where go)ernments, especially those at the municipal le)el, continue to suppress rural labor migration to reduce competition for local wor!ers. Another ma/or inter)ention is the go)ernment+s control o)er credit, which leads to allocations of capital that are biased against the rural sector. b. The second set of factors is the go)ernment+s use of direct transfer programs to fa)or the urban sector, e.g. price subsidies. This type of inter)ention was non"e,istent in the pre"reform period. .t is an outgrowth of the dilemma that has confronted the 6hinese go)ernment during reforms: its desire to impro)e the efficiency of the factor mar!ets re$uires reforms (say, greater rural labor mobility) that could erode urban welfare (a tighter urban labor mar!et). To escape the dilemma, the go)ernment increasingly has used direct transfers to protect urban income. This policy tool, unli!e the employment policies and capital allocations, does not introduce direct distortions in the optimal allocation of producti)e inputs, but, it may introduce inefficiency through other indirect channels, such as the negati)e effects of inflation. 1rban residents ha)e been protected by a )ariety of institutions and policies that are associated with the centrally planned system. The fact that urban labor has faced fierce competition in employment from rural wor!ers during reforms reflects the go)ernment+s past mista!es in pursuing hea)y"industry"oriented de)elopment strategy. #mpact on %conomic $rowth 2uring the coloni'ation of .ndia by the 8ritish, industriali'ation was not encouraged. 9ater pollution le)els were still low during the period of colonialism due to low le)els of urbani'ation and industrial de)elopment. (ollowing independence mobili'ation of water resources was seen as !ey to increasing agricultural producti)ity and to supply electrical power to the rapidly growing urban centers. As urban centers grew and industries de)eloped water was also seen as a way to disperse waste. These factors also tie into issues of en)ironmental degradation and the health impact of pollution. :ost independence as there was a lot of unemployment and the agricultural sector was not that lucrati)e. .ndia began to industriali'e, to add )alue to resources on its own instead of e,porting raw materials. Rural-Urban &ivide' #mpact on the !overt( in #ndia The country has witnessed around ; percent growth in <2: in the last couple of years.

.ndia+s urban population is increasing at a faster rate than its total population. 1rbani'ation has been recogni'ed as an important component of economic growth. At the national le)el, rural po)erty is higher than po)erty in urban areas but the gap between the two has decreased o)er the last couple of decades. 1rban po)erty poses the problems of housing and shelter, water, sanitation, health, education social security and li)elihoods along with special needs of )ulnerable groups li!e women, children and aged people. :oor people li)e in slums which are o)ercrowded, often polluted and lac! basic ci)ic amenities li!e clean drin!ing water, sanitation and health facilities. -ost of them are in)ol)ed in informal sector acti)ities where there is constant threat of e)iction, remo)al, confiscation of goods and almost non"e,istent social security co)er. The most successful group of migrants is urban to urban migrants in terms of type of occupation they ha)e and their income le)els due to better education and s!ills they possessed. .nflu, of migration towards -etropolitan cities indicates that economic reforms ha)e not been able to create much employment opportunities in small and medium towns and in rural areas. Causes of the Rural Urban &ivide in #ndia The &ural urban di)ide in .ndia has e,isted since recorded history but has aggra)ated in modern times. The reasons for the disparities are howe)er more clearly recorded in the modern times. .n broader terms, disparities can be attributed to three different types of factors: a. natural differences: agro"climatic conditions, geographical location, resource endowment etc. b. socio"cultural conditions: )alues and rigid traditions, and patron"client relationships, affect social and economic mobility, inno)ation and entrepreneurship. c. policy decisions: )chemes for Rural &evelopment *+ ,ational Rural %mplo(ment $uarantee -ct The 6entral <o)ernment launched the =ational &ural >mployment <uarantee Act 4005 (=&><A) on 4nd (ebruary, 400?. -ahatma <andhi =&><A aims at enhancing li)elihood security of households in rural areas of the country by pro)iding at least one hundred days of guaranteed wage employment in a financial year to e)ery household whose adult members )olunteer to do uns!illed manual wor!.

.+ )waran/a(anti $ram )waro0"ar 1o/ana 2)$)13 3<3@ is an integrated scheme for pro)iding opportunities of self employment to the rural poor. 3ome of its salient features are: 7rganising the rural poor into 3elf Aelp <roups (3A<s) through social mobili'ation Bey acti)ity and de)elopment of aciti)y clusters. Training and mar!eting support to the 3waro'garis .n)ol)ement of =<7sC687s Animators in social mobili'ation and training and capacity building of 3elf Aelp <roups 3warn/ayanti <ram 3waro'gar @o/ana (3<3@) has been restructured as =ational &ural 0i)elihoods -ission (=&0-) to implement it in a mission mode in a phased manner for targeted and time bound deli)ery of results. 1ni)ersal social mobili'ation through formation of 3A<s under =&0- will ensure at least one member of each rural 8:0 family, preferably a woman member, is co)ered under 3A< net. =&0- will focus on four streams of li)elihoods which would be as follows : 6oping with )ulnerabilities D debt bondage, food insecurity, migration health chec!s >,isting li)elihoods D stabili'ing and e,panding, ma!ing them sustainable 3elf employment D micro"enterprise de)elopment 3!illed wage employment opportunities in growing sectors of the economy 4+ Rural %lectrification' The -inistry of =ew and &enewable >nergy has also been implementing remote )illage electrification, )illage energy security test pro/ects and decentrali'ed biogas"based power generation programmes which include: 2*3=ational 8iogas and -anure -anagement :rogra$mme (=8--:) 2.33mall9ind >nergy And Aybrid 3ystems 2433mall Aydro :ower :rogramme )chemes for Urban &evelopment *+ 5awaharlal ,ehru ,ational Urban Renewal 6ission 25,,UR63 The Eawaharlal =ehru =ational 1rban &enewal -ission (E==1&-) was launched on 5rd 2ecember, 4005 The ob/ecti)e of the -ission is to encourage the city go)ernments to initiate measures that would bring about impro)ements in the e,isting ser)ice le)els in a financially sustainable manner. The -ission calls upon statesCcities to underta!e fiscal, financial and institutional changes that are re$uired to create efficient and e$uitable urban centres, and the -ission is reform"dri)en, which would largely meet

the challenges of urban go)ernance. .+ ,ational Urban )anitation !olic( The <o)ernment of .ndia launched the =ational 1rban 3anitation :olicy in 2ecember 400;. The main goal of the policy is to transform urban .ndia into community dri)en totally saniti'ed healthy and li)eable cities and towns. The )ision of the policy is that all .ndian cities and towns become totally sanitised, healthy and li)eable and ensure and sustain good public health and en)ironmental outcomes for all their citi'ens with a special focus on hygienic and affordable sanitation facilities for the urban poor and women. Awareness <eneration and 8eha)ioral 6hange; 7pen 2efecation (ree cities; .ntegrated 6ity 9ide sanitation; sanitary and 3afe 2isposal; and :roper 7peration and -aintenance of all 3anitary .nstallations are main goals of the policy. 4+ 7ther !ossible )teps which can be undertaken .n addition to the )arious programmes being underta!en by the <o)ernment of .ndia, a )ariety of inno)ati)e steps can be underta!en to ensure that the rural areas do not remain bac! in .ndia+s growth story. The ideas are as follows: a+ %8tension of 6,R%$- scheme to provide vocational /obs in rural areas 9e need to pro)ide non"agricultural /obs in rural areas. 0ocal s!ills based self employment in cottage industries should be encouraged through :::. 9ith high economic growth and proliferation of ser)ice industries (Telecom, &etail, (inance, 3ecurity and other support ser)ices), our cities are star)ed of trained man"power in s!illed and semi"s!illed categories, while our rural youth is unemployed and frustrated. 9e need to fill this demand"supply gap. Focational training to educated and semi" educated rural youth in collaboration with industry with reasonable assurance of /ob opportunity will bridge this gap. b+ )treamlinin" the financial s(stem to suit rural areas (armer suicides ha)e been lin!ed to repeated failure of crops coupled with burden of high interest loan from local lenders. -icro finance schemes ha)e shown great promise and need to be encouraged. >asy credit facilities and crop insurance schemes should be effecti)ely administered. c+ )teps to be taken for development of #nfrastructure The infrastructure de)elopment in .ndian )illages has perhaps been limited to the :-<3@ and much need to be done for infrastructure de)elopment. <i)en the huge in)estment re$uirement in infrastructure sector, pri)ate participation is critical and must be encouraged. <o)ernment should de)ice appropriate policy framewor!, dispute resolution mechanisms and -6As (-odel 6oncession Agreements) which would

encourage pri)ate in)estment in infrastructure. 3uccess of pri)ate participation in Telecom and =ational Aighways should strengthen the case for a mutually beneficial :ublic :ri)ate :artnership -odel in infrastructure in rural areas. d+ %ducation and healthcare sector improvement The &ight to >ducation Act only guarantees education to %# years only. Aowe)er, this scheme needs to be e,tended to include a larger population group to ensure that the rural youth are also pro)ided with ade$uate education opportunities. 7ur :ublic Aealth 3ystem is inefficient and has lost its credibility. An impro)ement in the health care scheme in rural areas would drastically impro)e the producti)ity in rural areas and increase .ndia+s social security scenario. A good start has been made through the =ational &ural Aealth -ission but this start should be made a success though continued effort and funding.