Rural development is a complex and slow process of undertaking diverse range of activities for welfare of masses which are deprived of luxury and comfort of developed cities. It requires a great amount of coordination between various sectors, with the impact of external environment posing a challenge due to its tendency to change rapidly. The change comes from internal as well as external processes such as privatization and globalization and over the years, the focus of the rural development programmes has shifted towards the overall economic and social upliftment of rural areas, through a sound strategy. The past five decades have witnessed a great transformation in rural development with launching of range of activities and programmes for welfare of rural areas. The range of activities include almost all facets of rural life such as agriculture, infrastructure development, communication, employment, education and many more to improve the well-being of 72.2% of total population of India.

It is accepted worldwide that planning process of India has been one of the most consistent amongst the efforts undertaken in the developing countries. Researchers from different regions of the world have acclaimed that the efforts have contributed significantly in many fields, most notably in the development of rural economies. However, still a number of problems remain in the distribution of incomes and low productivity continues to be major problem.

The rural sectors in India are primarily net suppliers of primary produce and generally, the net consumers of secondary and tertiary goods and services. Usually, employment in rural labour markets and agriculture are characterized as casual or informal, requiring low skill and having low productivity and returns. Therefore, development of the rural economy in general and agriculture sector in particular, is a key factor for achieving inclusive growth.

Inclusive growth in rural area envisages the change in economic structure, anchored on productivity growth in agriculture, involving a movement of labour away from the traditional sector. It must focus on small and marginal farmers, landless labours and women who face constraints of capital, land, access to credit market and modern inputs.

Broadly speaking, while the demographic centre of gravity (population pressure) has been shifting in the northern and eastern direction in India, the economic centre of gravity (economic growth) has been moving in the opposite direction. The western and southern states of India have continuously experienced faster economic growth, while the northern and eastern states lagged behind. As a result, the per capita income differentials have been widening even further. Low levels of literacy and skills result in lower earning capacity and conspire to keep people in the poverty trap, preventing them from embarking on new activities to earn income or build assets. For instance, Bihar and Jharkhand suffer badly from such nexus, where average rural literacy is far below the national average. Furthermore, hardly 17-18% of female population in Jharkhand and Odisha are literate above primary level. Low level of female literacy in the region is often associated with poor access to health and family planning facilities, poor awareness of proper child care and other hygienic practices which adversely affect the productivity of labour and welfare of the whole family. In these states, malnutrition among children below 5 years of age is rampant. It also affects the future development negatively and ultimately affects the labour productivity.

One of the main features of inequality in developing countries is the persistent income and productivity divide between urban and rural residents, which results in the concentration of poverty in rural and peri-urban areas. Confronting these challenges requires bold measures to accelerate rural transformation in order to increase the participation of rural communities in mainstream economic systems of developing countries, and improve the prospects of achieving many of the other sustainable development goals. Increasingly, states are recognizing the potential value of harnessing innovation for the inclusive developmental task, to build sustainable communities and an equitable society capable of confronting the looming threats of the twenty-first century.

With the global emergence of disruptive technologies typified as a ‘fourth industrial revolution’, more than ever before, successful rural transformation requires the use of innovative solutions directed to broadening the rural production base, from traditional activities into more productive sectors that enable members of rural communities to enhance their livelihoods and wellbeing.

The digital revolution, combined with strong economic growth in developing countries over the past 20 years, is one of the factors behind rapidly rising aspirations among rural youths in terms of economic advancement and having a say in their societies’ decisions. The defining characteristic of the digital revolution is a massive decline in the cost of information and the consequent massive increase in access to the information that is embedded in ideas, images, values, and goods and services from around the world. Despite considerable economic progress, the rising aspirations of young people may be outpacing the expansion of their economic and social opportunities. These rising aspirations, and the potentially negative social and political outcomes of a failure to meet those aspirations, underscores the need for action on the part of policymakers.

In all developing countries, young people make up a larger share of the rural population than of the urban population, and youth issues are therefore especially relevant in rural areas. Although the world’s two biggest youth populations are in China and India, the majority of countries, mainly in sub-Saharan Africa and Asia, with large rural youth populations are low-income nations with high poverty rates. For instance, nearly 1 billion out of the 1.2 billion people between the ages of 15 and 24 years reside in developing countries, and their numbers are growing far more rapidly than in higher-income countries (UNDESA 2017). Today, 65 per cent of the world’s rural youth live in Asia and the Pacific, and 20 per cent live in Africa, but Africa’s share is projected to rise to 37 per cent by 2050, while Asia and the Pacific’s will fall to 50 per cent.

Rural transformation ought to be seen as part of a broader process of economy-wide structural transformation, which alters the structure of landholdings, the technologies in use, the capabilities of rural women and men, and the distribution and dynamics of the population and labour force. The structural changes involved in rural transformation often require the harnessing of technological knowledge in order to broaden the range of productive activities that rural workers can engage in. Rather than contributing to growth and industrialization only, innovation can be a key factor in addressing urgent developmental challenges, such as providing access to drinking water and sanitation, eradicating neglected diseases, reducing hunger or providing appropriate healthcare and education.

For achieving rural transformation that is inclusive in its approach, the state need to adopt development strategies that enable and empower rural communities to seize the opportunities, while averting the threats associated with transformation processes. Experiences of Taiwan and South Korea during their phases of transforming agrarian rural economies into competitive industrialized ones demonstrates requirement of adequate policies that enable rural communities to harness modern production and commercialization techniques for developing strong and inclusive linkages with the national and the global economy. In Taiwan, for example, land reform programmes instituted by the state used public enterprise stock shares offered to landlords to convert investments in landholding into industrial assets, and thereby lay the foundation for industrialization. Likewise, land redistribution, agricultural innovation and skimming of agricultural surplus by the state played a crucial role in the development of South Korea.

The focus should be on building the social capabilities to ensure that end users acquire the knowledge and tools and the maintenance capacity to sustain the envisaged rural transformation. The involvement and capacity building of marginalized communities in solving problems they identify with and providing solutions based on their realities, would result in better development outcomes.