Rural Banking CAIIB notes – Unit 2
Unit – 2:
Characteristics of Rural Society
CHARACTERISTICS OF RURAL SOCIETY
- Rural areas in India are served by various types of banks.
- Understanding rural society is crucial for bankers to contribute to rural development.
- Panchayati raj (local self-government) plays a significant role in village development.
Social Stratification:
- Indian villages are not self-contained; interaction with other villages is common.
- Rural structure comprises family, kinship, caste, stratification, power, and religion.
- Villages have mechanisms for conflict resolution and social mobilization.
Unit of Development:
- Villages are recognized as units of development.
- They have formal and statutory institutions, including political parties.
- Villages possess identity, limits, commons, shared resources, and places of worship.
- Caste structure influences village dynamics.
Caste Structure:
- Villages consist of various “Jatis” (castes) with different roles.
- Some Jatis are linked to specific occupations, while others are open to all.
- The “Jajmani system” involves payment for services among Jatis.
- The caste structure consists of Brahmins, Non-Brahmins, and Scheduled Castes and Tribes.
- Landowners and affluent sections are often high-caste.
- Middle-class comprises small farmers and artisans.
- Villages are typically dominated by the high-caste and affluent population.
Traditional Panchayat:
- Villages had two types of panchayats: Jati panchayats and village panchayats.
- They dealt with property, family disputes, and inter-Jati conflicts.
- Statutory panchayats were introduced after independence.
- Conflicts can arise between traditional and statutory panchayats.
Factionalism:
- Factionalism is not part of the social structure but represents power struggles.
- Factions align with dominant individuals and families.
- Factions may support conflicting interests, even within the same Jati.
- They influence family disputes, conflicts between Jatis, and village politics.
Dominance:
- In some regions, specific Jatis became dominant landowners.
- These dominant groups often exploited the poor, including their own Jati members.
- Rural and urban populations are viewed differently.
- Economic, political, and social transactions occur between rural and urban people.
Various Influence:
- Rural society has evolved due to factors like migration, education, and political movements.
- Each region has unique customs, languages, and traditions.
- Infrastructure, education, and modernization reduced the influence of traditional panchayats.
- The growth of rural economy impacted caste dynamics and reinforced class distinctions.
- Caste hierarchy broadly corresponds to economic hierarchy in villages.
Set up of Panchayati Raj Institutions:
- Panchayati Raj is a three-tier structure for rural development in India.
- Three tier structures are – Gram Panchayat, Panchayat Samiti and Zila Parishad.
- It aims to establish local self-governments in districts, zones, and villages.
- Established in all states of India except Nagaland, Meghalaya and Mizoram, in all Union Territories except Delhi and certain other areas.
- The hill area of Manipur has a district council and Darjeeling district of West Bengal has, Darjeeling Gorkha Hill Council.
- Rajasthan and Andra Pradesh were the first to adopt Panchayati raj system in 1959, other states followed them later.
Committee related to Panchayati Raj System:
- Balwant Rai Mehta committee (1957) – Three tier Panchayati raj system namely Gram Panchayat, Panchayat Samiti, and Zila Parishad
- Ashok Mehta Committee (1977)- The three-tier system should be replaced with two tier structure i.e., Zila Parishad and the Mandal Panchayat.
- GVK Rao Committee (1985)- Zila Parishad is the most important body in the scheme of democratic decentralization.
- L M Singhvi committee (1986) – Recommended that Panchayati Raj should be constitutionally recognized.
Constitutional amendment act of 1992:
- The Parliament passed two amendments to the Constitution- the 73rd Constitution Amendment for rural local bodies (panchayats) and the 74th Constitution Amendment for urban local bodies (municipalities) making them institutions of self-government’.
- The Act added Part IX to the Constitution, “The Panchayats and also added the Eleventh Schedule, which consists of the 29 functional items of the panchayats.
- Reservation of seats for SC, ST, and women was introduced.
PESA Act 1996:
- Part IX provisions didn’t apply to Fifth Schedule areas.
- PESA Act- Panchayats (Extension to Scheduled Areas) Act 1996: a law enacted by GOI for ensuring self- governance through traditional Gram Sabhas for people living in the Scheduled Areas of India.
Role and function of local bodies:
- Gram Panchayats maintain village infrastructure and perform various duties. It is the primary body.
- Panchayat Samiti operates at the block level, coordinating development activities. States with a population of less than 20 lakhs, may not constitute.
- Zila Parishad functions at the district level, connecting with state and central levels.
- Their responsibilities include economic development, public health, education, and more.
- Local bodies receive funds from the state government through grants.
- They can also impose taxes, tolls, and fees on specific goods.
- State Finance Commissions review their financial positions.
Rashtriya Gram Swaraj Abhiyan (RGSA) :
- The Union Finance Minister in his budget speech for 2016-17, announced the launch of a scheme to enhance the capacities of Panchayati Raj Institutions.
- Aims for responsive local governance, technology-driven planning, and sustainable development.
- Promotes democratic decision-making, people’s participation, and gender equality.
- Strengthens knowledge creation and capacity building for Panchayats.
National Institute Of Rural Development & Panchayati Raj :
- A government organization under the Ministry of Rural Development in India.
- A top national centre for rural development and Panchayati Raj, aiming to improve the lives of rural people.
- Originally started as the National Institute of Community Development in 1958, it moved to Hyderabad in 1965 and was renamed the National Institute of Rural Development in 1977.
- In 2013, it became the National Institute of Rural Development and Panchayati Raj (NIRD & PR) to emphasize strengthening Panchayati Raj systems.
- Organize training programs, conferences, seminars, and workshops for various development stakeholders.
DEMOGRAPHIC FEATURES
Introduction:
India’s population has steadily grown since independence. The annual increase in population is equivalent to the entire population of Australia. HDI, developed by the United Nation Development Programme (UNDP), measures living conditions worldwide. It is used to assess whether people have a better life compared to the past. Due to population pressure on land and agriculture, people migrate to urban areas in search of better opportunities.
Population
India’s population history marked by high mortality from famines, diseases, and war. High fertility once necessary for population stability. Population stability achieved by better disease control, monsoon adaptation, increased life expectancy.
Global Population Position:
India among world’s most populous countries. Decadal growth rate declined from 21.5% to 17.7%. Percentage of decadal growth rate of population has been declining since 1971-81 and it is more prominent in EAG States (Empowered action group states viz. Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Rajasthan & Odisha).
Demographic Transition Stages:
India currently in stage three of demographic transition. Transition from high mortality and fertility to low mortality and fertility.
Demographic Indicators:
Crude birth rate (the number of live births occurring during the year, per 1,000 population estimated at midyear) at 20.0 in 2018, declining from 2017. It is highest in Bihar (26.2), and lowest in Kerala (13.9).
Crude death rate (the number of deaths in each period divided by the population exposed to risk of death in that period) at 6.2 in 2018.
Infant mortality rate (IMR) (the number of deaths of children under one year of age, expressed per 1 000 live births) declined to 32 in 2018.
Sex ratio at birth (943 in 2011) has improved.
Total fertility rate (TFR) (the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates) stable at 2.2 in 2017-18.
Population Structure and Urbanization:
Population Pyramids represent complex changes in age structure of the population. In developed countries, the shape of population structure is almost cylindrical instead of a pyramid because of the high life expectancy, low fertility, and relatively low population in reproductive age group. Developing countries, including India, have more children and young adults. Hence, the shape of population structure is pyramid.
Economic Impact:
GDP growth rate over 10.2% during 2001-10. Per capita income doubled. Food production growth slightly lower than population growth. Increasing urbanization affecting larger cities.
Literacy in India: Key Points
Literacy means the ability to read, write, and understand information to communicate effectively. It is crucial for personal development, awareness, and skills.
Literacy Rates in India (2011 Census):
India’s average literacy rate is 74.04%. Kerala has the highest literacy rate at 93.91%, while Bihar has the lowest at 63.82%.
Progress in Literacy:
India improved its literacy rate from 64.80% in 2001 to 74.04% in 2011. Female literacy rate increased from 53.7% (2001) to 65.5% (2011).
Constitutional Provisions:
Education of Minorities: Article 30 of the Indian Constitution gives all minorities, the right to establish and administer institutions of their own choice.
Free and Compulsory Education: The Constitution of India (u/a 41, 45 and 46 of the Directive Principles of State Policy instructs the state to ensure that all citizens receive free education.
Article 21 (A) of the Constitution of India was amended to provide free and compulsory education as a fundamental right to all children aged between 6 and 14 years.
Article 15, 17, and 46 of the Indian Constitution safeguard the educational interests of weaker sections of the society.
Challenges and Gender Disparity:
Gender disparity in literacy exists due to lack of education for women and deep-rooted discrimination. Government initiatives like scholarships, mid-day meals, and awareness campaigns aim to bridge this gap. Scholarships, free textbooks, and stationery to encourage studying. The Mid-Day Meal Scheme was launched by the government in 1995, to provide students free food so as to improve enrolment, attendance, and retention in government schools. Samagra Shiksha Program for improving school effectiveness. Awareness campaigns to promote education in rural areas.
Sixth Economic Census: Key Points
Data is essential for planning and development. Central Statistics Office, GOI, creates and updates databases for economic sectors.
Sixth Economic Census (2013-2014):
Conducted across all Indian states and Union Territories. Included all economic activities except crop production, public administration, defence, and social security. Seventh Economic Census also initiated but delayed due to the pandemic.
Establishments in India:
India has 58.50 million establishments in the country, engaged in different economic activities other than crop production, plantation, public administration, defence, and compulsory social security services. 34.80 million (59.48%) in rural areas, 23.70 million (40.52%) in urban areas.
Uttar Pradesh, Maharashtra, West Bengal, Tamil Nadu, and Andhra Pradesh have the most establishments.
Among these establishments, 45.37 million (77.55 per cent) were engaged in non-agricultural activities, while the rest 13.13 million (22.45 per cent) were engaged in agricultural activities, other than crop production and plantation.
Employment:
131.29 million people employed in establishments (67.89 million in rural, 63.40 million in urban).
Maharashtra, Uttar Pradesh, West Bengal, Tamil Nadu, and Gujarat account for 50% of employment.
About 108.41 million workers, constituting 82.57% of total employment, worked in non-agricultural establishments and 22.88 million (17.42 per cent) worked in agricultural establishments.
The share of females in total employment of 131.29 million was 33.04 million, which is around 25.17 per cent of total employment; 61.90 per cent of the female employment was in rural areas.
Under agricultural activities livestock give maximum employment with 19.42 million workers, constituting 84.86 per cent of the total employment in the agricultural sector.
Agricultural Establishments:
Agricultural Establishments including agriculture, livestock, forestry, and fishery.
13.13 million agricultural establishments (22.45% of total).
92% in rural areas.
22.88 million employed (17.42% of total employment).
38.85% of employment for females.
Gujarat, Tamil Nadu, Maharashtra, Andhra Pradesh, and Uttar Pradesh have the most agricultural establishments.
Non-Agricultural Establishments:
45.36 million non-agricultural establishments.
24.15 million females employed (22.28% of total non-agricultural employment).
Manufacturing, retail trade, and education employ the most.
Handicraft/Handloom Establishments:
18.73 lakh handicraft/handloom establishments in India.
Majority (59.6%) in rural areas.
West Bengal, Uttar Pradesh, Odisha, Andhra Pradesh, and Tamil Nadu have the most establishments.
Around 42 lakh people employed; 52.67% in rural areas.
Women-run establishments make up 13.76% of the total.
8.05 million establishments owned by women entrepreneurs.
Tamil Nadu, Kerala, Andhra Pradesh, West Bengal, and Maharashtra have the most women-owned establishments.
Agriculture Census: Key Points
Agriculture is vital for India’s economy, providing livelihoods and raw materials.
Accurate agricultural statistics are crucial for land-holdings and development planning.
Agriculture Census Scheme started in 1970-71, conducted every five years.
Focuses on operational holdings (land use, cropping, irrigation, etc.).
Provides data for development planning, policy, and national priorities.
Operational Holdings Categories:
On the basis of operated area, operational holdings in Agriculture Census are categorized as follows:
Highlights of Agriculture Census 2015-16:
Total operational holdings increased to 146.45 million (5.86% increase from 2010-11).
Marginal category had the highest share (68.5%).
Total operated area decreased slightly to 157.82 million ha.
Average size of operational holdings decreased to 1.08 ha.
Female operational holders increased to 13.96%.
Almost 98% of holdings are wholly owned and self-operated.
Gross cropped area decreased slightly to 191.76 million ha.
Highest net sown area was observed in marginal category (90.4%) and lowest in large category (82.8 per cent).
Net irrigated area increased to 48.7% of net sown area.
Gross irrigated area increased to 49.8% of gross cropped area.
Cropping intensity remained static at 1.37.
Slight decrease in the percentage share of food crops in gross cropped area (75.1%).
Slight increase in the percentage share of non-food crops (24.9%).
The Agriculture Census provides essential data on India’s agricultural landscape, including land use, holdings, and cropping patterns, which are vital for planning and policymaking in the agriculture sector.
Human Development Index (HDI):
HDI measures a country’s development based on three key factors: a long and healthy life, knowledge, and a decent standard of living.
It was created by Mahbub ul Hag to emphasize that development isn’t just about economic growth. It is a tool to compare countries’ human development outcomes and question their policy choices.
HDI uses life expectancy, education levels, and income to calculate a composite index.
HDI doesn’t consider inequalities, poverty, or other important aspects of development.
India was ranked 131 out of 189 countries in the HDI Index Ranking 2020.
Gender Development Index (GDI):
GDI measures gender gaps in human development, focusing on disparities between men and women in health, knowledge, and living standards.
It uses the same indicators as HDI and calculates separate scores for females and males.
GDI is a direct measure of gender gap, showing how much women lag behind men in human development.
It helps understand gender inequalities and informs policy decisions to close these gaps.
India ranked 112th out of 153 countries in the Global Gender Gap Index 2020.
These indicators are essential for assessing a country’s development beyond just economic growth and understanding gender disparities in human development achievements.
Health and Economic Growth:
Good health is crucial for a country’s economic performance.
Healthier people are more productive, stay in school longer, and have higher savings rates.
Healthy populations attract foreign investment. Research shows that healthier countries tend to experience faster income growth.
Health Statistics in India:
Life expectancy in India has increased from 49.7 years in 1970-75 to 68.7 years in 2012-16.
Infant mortality rates have decreased, but rural-urban disparities still exist.
Challenges in Indian Health Sector:
Limited primary healthcare services, covering only a fraction of health needs.
Deficiencies in health worker training and supervision.
Low public health funding (around 1.3% of GDP).
Overlapping jurisdiction in health governance.
Challenges in addressing non-communicable diseases (e.g., diabetes, heart diseases).
Government Initiatives:
Various programs to improve maternal and child health, including Reproductive, Maternal, Newborn, Child and Adolescent Health (RMNCH+ A) program and Rashtriya Bal Swasthya Karyakram (RBSK).
Rashtriya Bal Swasthya Karyakram aims at early identification and early intervention for children from birth to 18 years, to cover 4 ‘D’s viz. Defects at birth, Deficiencies, Diseases, Development delays including disability.
Focus on adolescent health through Rashtriya Kishor Swasthya Karyakram.
Promotion of institutional deliveries through Janani Shishu Suraksha Karyakaram.
Programs to address non-communicable diseases and conditions like diabetes and heart diseases.
National AIDS Control Organization for HIV care.
National TB Control Program for free tuberculosis diagnosis and treatment.
National Leprosy Eradication Program for early detection and care.
Mission Indra Dhanush to improve immunization coverage.
National Mental Health Program for mental healthcare accessibility.
Pulse Polio campaign to eliminate polio.
Pradhan Mantri Swasthya Suraksha Yojana to improve healthcare availability.
Rashtriya Arogya Nidhi provide financial assistance to the patients that are below poverty line (3.2 crore people in India) and are suffering from life-threatening diseases, to receive medical treatment at any government run super specialty hospital/ institution.
National Tobacco Control Program to raise awareness about tobacco’s harmful effects.
Integrated Child Development Service to enhance child nutrition and health in the age group of 0-6 years.
Rashtriya Swasthya Bima Yojana for health insurance coverage for the poor.
These initiatives aim to improve the overall health and well-being of India’s population and address healthcare challenges.
Nutrition Challenges in India:
India world’s largest producers of milk & pulses and second-largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruits, and cotton.
India is a major producer of food but faces significant nutrition challenges.
14% of India’s population is undernourished, as per a report.
34.7% of children under five in India are stunted.
20% of Indian children under five suffer from wasting (low weight for height).
India has the highest number of malnourished children globally.
Nutrition Trends:
Anemia among children has reduced but remains high at 58.6%.
Severe child wasting has increased from 6.4% to 7.5%.
Child stunting stands at 38.4%.
Bihar and Uttar Pradesh have the highest number of malnourished children.
Some states like Kerala and Tamil Nadu fare better in terms of malnutrition.
Global Hunger Index (GHI):
India ranks 102 out of 117 assessed countries in GHI 2019.
India’s score of 30.3 falls into the ‘serious’ category.
Neighbouring countries like Nepal, Bangladesh, and Pakistan have better rankings.
Government Initiatives:
Various large-scale feeding programs aim to combat malnutrition.
Programs include prophylaxis against nutritional anemia, Special Nutrition Program (SNP), Balwadi Nutrition Program (BNP), Integrated Child Development Service Scheme (ICDS) program, and Mid-day meal programs (MDM).
These programs target children, lactating mothers, pregnant women, and women in reproductive age groups.
Challenges remain in the large-scale implementation of these programs.
Education System in India:
The 86th constitutional amendment made elementary education a fundamental right for children aged 6 to 14.
India’s education system includes primary, secondary, senior secondary, and higher education.
India has several world-class educational institutions like IITs, IIMs, NLSIU, JNU, etc.
The number of universities has grown significantly, with over 1000 by 2020.
Inclusivity Measures:
Reservation system: 7.5% seats for ST, 15% for SC, and 27% for non-creamy layer OBCs in higher education.
Some states customize these percentages based on local demographics.
Minority groups can establish their educational institutes.
Efforts to improve women’s access to education, including exclusive institutes or reserved seats.
Growth of distance learning and open universities is democratizing higher education.
Challenges:
While dropout rates at the primary level have reduced, it is still high (17%) at the secondary level.
The dropout problem is more pronounced in states like Jharkhand, Arunachal Pradesh, Nagaland, Bihar, and Mizoram.
Only 70 out of 100 students’ complete school on average in India.
Challenges include improving curriculum, promoting vocational education, and addressing poverty-related barriers.
Access, equity, and quality of education remain concerns, especially among marginalized populations.
Rural-Urban Migration in India:
India experiences both traditional and seasonal rural-urban migration.
Traditional migration happens as villagers seek better opportunities and lifestyles in cities.
Seasonal migration occurs during hardships, with migrants returning to villages for events like harvest and festivals.
Urbanization in India has accelerated over the years.
In 1901, 11.4% lived in urban areas; by 2011, it crossed 30%.
A UN report predicts that by 2030, 40.76% of India’s population will live in urban areas.
Causes of Migration:
Marriage is a significant reason for migration in India.
People migrate for employment opportunities, especially because rural agriculture often can’t provide jobs for everyone.
Lack of educational facilities in rural areas leads to migration for education, and many students stay in cities after completing their education.
Political disturbances and conflicts can also force people to leave their homes.
People migrate for short-term reasons like recreation, healthcare, and services available in towns.
Push and Pull Factors:
Cities attract people with better employment opportunities, modern lifestyles, and improved living conditions (pull factors).
People are pushed to migrate due to factors like unemployment, hunger, and lack of opportunities in their hometowns.
Migration Trends in 2011:
In 2011, 64.24% of migrants had relocated more than 10 years ago, and 35.75% were recent migrants who had moved in the last ten years.
A small percentage (4.56%) had migrated less than a year ago, indicating an increase in recent migration.
Rural-origin migrants comprised 68% of the total migrant population, while urban-origin (people choose to move from a less populated area to more densely populated areas which often present more work opportunities, better pay, or a better quality of life) migrants made up 22%.
Marriage was the most significant reason for migration in 2011, followed by employment, business, and education.
The importance of employment and education in migration has increased over time, while marriage’s role has declined.
These trends show that migration in India is driven by a combination of social, economic, and personal factors, with increasing importance placed on employment and education in recent years.
Dear CAIIB Aspirants,
These notes are a part of 2024 CAIIB Video library course of Rural Banking (Elective paper) by Motivational Banker. These notes are intended to help you prepare better for your CAIIB exam.
These notes are a sample version of the full PDFs prepared by team Motivational Banker.
Download full PDF –
