Page 44 - Banking Finance January 2025

ARTICLE

The Rural Revival:

India's Quest for a

Balanced

Sushil Maithani
Development Union Bank of India
Faculty
ZLC Hyderabad

The Reserve Bank of India's (RBI) push to enable Unified Payments Interface (UPI)-backed cash
withdrawals from ATMs is likely to cause a severe dent in the usage of debit cards, according to
payment industry executives.

Introduction India's rural economy has always been a cornerstone of its
"The soul of India lives in its villages." Mahatma Gandhi's national economic structure. Historically, India's rural heart-
famous quotes still hold for modern India. Rural India is home land has been agrarian, with agriculture contributing a sig-
to around 63.40% of the country's population. The Reserve nificant portion to its GDP (Gross Domestic Product). How-
ever, the rural economy extends beyond agriculture, encom-
Bank of India defines rural areas as those with a population
passing rural industries, artisanal crafts, and Micro, Small
of less than 49,000. The current population of India is
1,453,721,920 as of September 2024, based on and Medium-sized enterprises (MSMEs).
Worldometer's elaboration of the latest United Nations data
Traditionally, rural India has been characterized by subsis-
within which 36.60% of the population is residing urban area
and remaining approximately 63.40% of the Indian popula- tence agriculture, but over the decades, there has been a
tion residing in rural areas, any strategy aimed at economic shift towards diversification with rural non-farm activities.
revival and growth must centrally include rural develop- This historical evolution emphasizes the transformative po-
ment. The Indian Union Budget for 2024-25, presented by tential embedded within the rural economy. Between 2013-
the finance minister, has reaffirmed the government's com- 14 and 2023-24, the agriculture sector has grown at an
annualised growth rate (CAGR) of 4% at constant prices.
mitment to rural development. This year's budget under-
Further, in rural regions, between 2017-18 and 2022-23, the
lines the importance of bolstering the rural economy, rec-
Female Labour Force Participation Rate (FLFPR) for women
ognizing it as the bedrock of India's overall economic frame-
work. aged 15 years and above rose from 25% to 42%. FLFPR tracks
the percentage of women who are either working or look-
ing for work.
Significance of Rural Economy and Histori-
cal Perspective A higher rate indicates increasing willingness among women

With agriculture as its cornerstone, the rural economy con- to take part in economic activities. As per the Periodic
tributes significantly to India's economic growth engine. Labour Force Survey (PLFS) 2022-23, the rise in women's

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