India’s rural sector and Covid-19

The rural economy of India is under strain now. Hitherto untouched areas are now been penetrated deep inside the by the pandemic. This has created a situation, perilous for not only the rural economy, in particular but also, for the whole economy, in general.

The second wave of pandemic has wreak havoc upon the rural hinterlands. Not only the human resource development in terms of farmers have been affected, but, the supply chain network has also been affected to a considerable extent.
“Isolation” is one of the modus-operandi, that policymakers usually employ to deal with the situation. Therefore, it has ostensibly impacted supply-chain logistics.

Agricultural economists, on repeated occasions, have stressed upon improving the efficacy of the marketing network of the agricultural system, so as to augment the rural income. Pandemic has just struck a blow at the weakest link of the agricultural system. If immediate and effective steps are not being taken, this will bound to lead to severe repercussions for the Indian agricultural system as a whole.

Agriculture-the home of largest informal sector

The highest number of informal employment (93.6%) rests with the agriculture sector, as per the report of ILO. As the informal sector unlike the formal sector is not loaded with benefits, there thus persists high vulnerability of the informal sector against such unprecedented crisis.

Agriculture is not something, that yields enough profit. Most of the farmers are small farmers and marginal farmers, and therefore, they do not have the resources at their disposal which can, thereby, turn the agricultural sector into a profitable venture. Not only it is loaded with disadvantages of the informal sector, but in addition, the agriculture sector has a problem of its own, inherent in nature.

What needs to be done?

First of all, the pandemic should be contained at all costs. No doubt, the pandemic has already been entered the hinterland of the rural areas, but still all efforts should be mobilized to contain the spread.
Further, the rural programs should be awarded more resources. This is important, so as to keep the purchasing power of the rural sector high and it won’t dwindle the consumption potential of the rural sector. According to Keynes, consumption has the potential in itself to revive the economy on its own, as we have observed in the past depressions.
Direct cash transfer is another better option, that can be availed of at this juncture.
Finally, Supply chain networks should be given utmost importance. The poor logistic framework is one of the main reasons for the impoverishment of farmers. The vehicular movements on the roads, at present, have been reduced to a considerable extent on account of the imposition of strict lockdown. This could be utilized in streamlining and improving the road network around the villages.

Agriculture is still considered as the backbone of our nation and proper emphasis has to be given for its proper management.

About the author


My name is Vipal Bhagat, going to be doctorate in applied economics. My aim is to analyse and interpret the current economic happenings around us, according to the core and basic principles of economics.

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