NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, April 26, 2012

When you think rural India, think factories and cell phones, rather than fields and bullock carts.

Rural India, says a Credit Suisse report, is no longer an agrarian economy whose fortunes are dependent upon an erratic monsoon. Rather, they are now increasingly tied to the national economic cycle, something they had been largely immune from so far, as it gradually shifts away from agriculture.

A decade ago, agriculture was about half of rural gross domestic product. Now that figure has dropped to about one-fourth.

“The transition from agriculture to industry and services has been very rapid in rural India over the past decade,” the report says. Instead of plowing fields, men (and women) in rural India are increasingly moving toward manufacturing jobs, which are now coming up more and more in rural India.

In 1978, 81% of rural males considered agriculture as their primary employment. In the financial year that began in April 2005 this number dropped to 67%, and, five years later, to 55%. The change seen in this five-year period is comparable to the that seen in the previous 27 years, the report showed. The trend is similar for female rural employment as well.