Effects of Globalisation on Indian Society: Globalisation and the rural economy

Globalisation and the rural economy

Imagine a village shop that only sold to its own street. One day a highway opens to a big city. The shop can now sell more, but it also faces city shops with lower prices. That is roughly what happened to rural India after 1991.

What changed after 1991, in simple words

In 1991 India faced a payment crisis and opened up. This step is called liberalisation, which means removing many government controls on trade and business. Imports and exports became easier. Private and foreign companies could invest more. Villages felt this in three big ways.

• Farming became more commercial. Commercial farming means growing crops mainly to sell, not to eat at home. Farmers moved towards fruits, vegetables, spices and dairy, which sell well in cities and abroad.
• Non-farm work grew. Non-farm work means rural jobs outside farming, such as construction, transport, shops and small factories.
• Connectivity improved. Mobile phones, TV and later the internet reached villages. Farmers could check crop prices and weather on a phone.

Prelims 2020 asked candidates to consider statements on the Indian economy after the 1991 economic liberalization. Answer (b): statements 3 and 4: in rural areas, the growth in non-farm economy increased, and the growth rate in rural employment decreased. In plain words, villages got more non-farm activity, but total job growth there slowed down, partly because machines replaced some farm labour.

Why women are doing more of the farm work

Feminisation of agriculture means that women form a growing share of the people working on farms. Mains 2014 asked candidates to discuss the various economic and socio-cultural forces that are driving the increasing feminization of agriculture in India: male out-migration to cities as globalised sectors grow, falling farm incomes, and women staying back with care duties (see the women chapter).

• Economic forces: men leave for city jobs in construction, factories and services. Small farms earn too little, so families need cash from outside.
• Socio-cultural forces: women are expected to stay home to look after children and elders, so they manage the fields too. Yet few women own the land they farm, which means they often can’t get bank loans or government farm schemes in their own name.

The two sides of globalisation for villages

The table sums up the effect on rural India. Use it as a ready-made skeleton for a Mains answer.

• Markets: a farmer growing grapes in Nashik can sell to Europe. But if world prices fall, the farmer’s income falls too, even with a good harvest. That up-and-down is called price volatility.
• Jobs: new work appears, but distress migration also rises. Distress migration means people leave home because they can’t survive there, not because they found something better.
• Technology: digital payments and weather messages help. The digital divide, which means the gap between people who have internet and those who don’t, leaves the poorest behind.
• Culture: young people dream bigger. Cheap factory goods can push out local crafts such as handloom and pottery, and packaged food can replace local foods.

Who gained and who lost

Larger farmers with irrigation, savings and good roads gained the most, because they could grow for distant markets. Small and marginal farmers (those with under two hectares) and village artisans found it harder to compete. So globalisation raised average incomes but also widened gaps inside villages.

What UPSC asks: Prelims asked about non-farm growth after 1991 (2020). Mains asked about the feminisation of farming (2014). Next likely angle: the digital divide in villages.