POLITICAL Environment
• The political environment in rural areas focuses on understanding the Panchayati Raj System and its
functioning, as it plays a critical role in many spheres of rural consumers’ lives.
• The salient features of Panchayati Raj under the 73rd Amendment are:
■ To provide a three-tier system of Panchayati Raj for all states with a population of over two million.
■ To hold panchayat elections regularly every five years.
■ To provide reservation of seats for Scheduled Castes, Scheduled Tribes, and women (not less than 33
per cent).
■ To appoint a State Finance Commission to make recommendations with regard to the financial powers
of panchayats.
■ To constitute a District Planning Committee to prepare draft development plan for the district.
■ According to the Constitution, panchayats shall be given powers and authority to function as
institutions of self-government.
Gram Sabha
• general assembly of villagers called the Gram Sabha has to be organized, involving people’s
participation and necessarily including the rural poor, women and marginalized communities in
decisions on matters affecting their lives.
• The active functioning of the Gram Sabha will ensure participatory democracy with transparency,
accountability, and achievement.
• The Gram Sabha should meet at least once in each quarter, preferably on Republic Day, Labour Day,
Independence Day, and Gandhi Jayanti. Role of the Gram Sabha:
■ Decides the developmental work to be undertaken by panchayats, based on a needs
assessment.
■ Suggests remedial measures for economy and efficiency in the functioning of the panchayats.
■ Questions and scrutinizes the decisions of panchayats in its meetings.
■ Discusses the annual financial statement of gram panchayats.
ECONOMIC Environment
• The rural economy has changed from a slow-growth, subsistence
agriculture economy to a fast-growth economy.
• Economic liberalization and government-led infrastructure development
have opened up the rural economy.
• Better access to goods, markets, and funds has kickstarted the more
resilient non-farm sector.
• rising and stabilizing rural income has resulted in consumption growth
• The rural economy has undergone a structural shift, from predominantly
farmbased to a mix of farm, off -farm, and services economy
TECHNOLOGICAL Environment
• The changes in the rural technological environment were triggered by rapid mechanization in
farming after the Green Revolution, and the information and communication technology
revolution in the last decade.
• RAPID MECHANIZATION: There has been a sustained increase in the adoption of
mechanization to ensure greater returns on investment (RoI) and sustainability of agriculture.
• Mechanization, primarily driven by the increased use of tractors, is replacing manual and
animal labour.
• As a consequence of the mechanization of agriculture, the share of animal power has
declined from 16 to 7 per cent, and the share of tractor power has increased from 30 to 46
per cent between 1990–91 and 1995–96
• India is the second largest manufacturer of tractors in the world, with annual sales of 342,000
tractors (2009–10). There are 16.7 tractors per 1,000 hectares at present.
IT Revolution
• Information and communication technology is making inroads into, and changing the
face of, rural India.
• The evolution of the computer, Internet, and mobile phones has had a tremendous
impact on the lives of rural people. It is connecting farmers to food retailers, enabling
them to sell the produce at high farm gate prices without delay.
• Before ITC introduced e-Choupal, farmers were restricted to selling their produce to
middlemen in the local mandi at low prices.
• Today they have formed a community of e-farmers who have access to the daily prices
of a variety of crops, wider markets, weather forecasts, the latest farming techniques,
crop insurance, etc.
• This is transforming the Indian farmer into a progressive, knowledge-seeking netizen.
• The e-Choupal project is currently benefiting four million farmers in 40,000 villages
through 6,500 e-choupals.
SOCIAL and Cultural Environment
• Socio Cultural Regions- is a group of districts clubbed together, based on linguistic
homogeneity combined with geographical contiguity, financial, economic and
administrative homogeneity, and regionalization of culture and lifestyle
• Village community- villages have in many ways been self-sufficient and
autonomous. Earlier, because of their experience and maturity, the elderly were
considered more capable of advising and leading the village.
• Caste Based System-Indian society had a definite hierarchy. Brahmins at the top
followed by Kshatriyas (warriors), Vaishyas (business class and traders), Shudras
(involved in low-skilled and odd jobs) at the bottom.
• However, over the last few years the influence of the caste system appears to be
reducing