Different Rural Non-Farm Sectors:

• The top four sectors contributing to the non-farm jobs are Trade and Hospitality (15.6 %), Construction (14.3 %), Transport (5.7 %) and Education & Health (1.6 %).
• The Rural Non-Farm Sector (RNFS) encompasses all non-agricultural activities undertaken by enterprises varying in size from household units to factories. (Rural workers data from PLFS in percentage)

1. Mining and Quarrying: 0.5% of rural males and 0.2% of rural females are employed in this activity.
2. Household and Non-Household Manufacturing: About 52.2 % of rural households had major source of income from self-employment. The share of rural households with major source of income from casual labour was 25 % and that of regular wage/salary earning was 12.7 %.
3. Construction: 14.5 % and 5.3 % of male and female workers respectively.

• In rural India, there has been an increase in workers engaged in ‘construction’, from 1.7 % (1977-78) to 14.5 % (2017-18) for males and from 0.6 % (1977-78) to 5.3 % (2017-18) for females.

1. Manufacturing: 7.7 % and 8.1 % of male and female workers respectively.
2. Trade, Hotel and Restaurant: 9.2 % and 4.0 % of male and female workers respectively.
3. Transport, Storage and Communications: 5.2 % and 0.3 % of male and female workers respectively.

Government Schemes:

1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Started in 2005, it was intended to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
2. Deendayal Upadhyay Grameen Kaushal Yojana: The Ministry of Rural Development implements DDU-GKY to drive the national agenda to transform its demographic surplus into a demographic dividend, for inclusive growth, by developing skills and productive capacity of the rural youth from poor families.

• The scheme funds training projects benchmarked to global standards, with an emphasis on placement, retention, career progression and foreign placement.
• In 2018-19, 2,26,850 candidates were trained as against a target of 2,00,000 in 433 different trades conducted in 1,196 centres.

3. Deen Dayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) seeks to reach out to 8-9 Cr. rural poor households and organize one-woman member from each household into affinity-based women SHGs and federations at village level and at higher levels.
4. Aajeevika Grameen Express Yojana (AGEY): It is a new sub-scheme under the DAY-NRLM.

• The Self-Help Groups under DAY-NRLM will operate road transport service in backward areas.
• Around 624 routes are currently served by AGEY across the country as on January, 2019.

Challenges:

1. Infrastructure: There is a lack of quantity, quality and reliability in infrastructure.
2. Regulatory restrictions on small sectors: In the initial stages, capital investment restrictions were imposed to protect the small-scale sector from predation by large industry.

• With trade liberalisation, reservations for small-scale industries were replaced with Micro, Small and Medium Enterprises (MSME) Act. It is to promote MSME enterprises but it is reported to have urban biases.
• Reservation of products for the sector was initiated to create a domestic market and quantitative restrictions imposed to protect them from competition from imports.
• However, these very policies have become detrimental to the dynamism of the small-scale sector, especially in the rural areas.
• Capital investment limits have discouraged economies of scale, and concessions offered to small industry have created adverse incentives.
• The decision of the government to put all the reserved items in the open general license category from April 2005 meant free import of such items at the prevailing tariff rate.
• With the latter slated to come down over time to around 20 % as per the WTO norms, this will effectively signal the end of protection for the small-scale industry.

1. Education and Awareness: High levels of illiteracy in rural India have hampered the growth of the rural non-farm sector.
2. Migration of skilled labourers: migration from rural to urban regions also leads to a decline of workforce in the rural small-scale industries.

Way Forward:

• Providing more financial/credit facilities, research and development and increasing women’s participation are some of the ways of making non-farm activities self-sustainable in the days to come.
• Development of roads, increase in road connectivity, improvement of power supply will lead to more flourished non-farm sector.
• Huge investments are needed for inclusive, sustainable and diversified rural development along with the right governance system.

Conclusion:

• Between 2011 and 2015, the number of agricultural jobs fell by 26 million while non-farm ones rose by 33 million, according to different international studies on India’s labour market.
• Agriculture needs to be incentivized in its own way along with the development of non-farm activities to improve the economic situation of rural India.