Impact on India economy

• Several parts of the non-farming industry have dynamic relationships. Rural communities benefit from such connections because they promote healthy growth.
• In comparison to farming, the non-farm industry gives employment opportunities throughout the year. As a result, it aids in the eradication of poverty in rural areas.

When it comes to earnings, research has indicated that regular workers in the rural non–farm sector earn 2.4 times more than those in agriculture. Some independent research also implies that in recent years, there has been a shift in the trend away from self-employed agricultural backgrounds and toward higher-paying non-farming industries.

• Agriculture’s economic contribution to India’s GDP has been progressively dropping over time.
• This helps to explain why employment in the non-farm sector is increasing. Agriculture employs 64 percent of rural workers, whereas agriculture accounts for 39 percent of rural production.
• As a result, lowering the rural population’s reliance on agriculture as a source of income will help to enhance the rural population’s overall income.

Non-farming producing activities are related to those economic activities that do not directly relate to agricultural activities. Generally, marginal farmers and landless laborers are getting benefits from these activities, which provide them a good source of income and employment. Non-farming activities include handicrafts, small-scale manufacturing (both domestic and non-domestic), construction, mining, quarrying, repair, transportation, community service, and so on. 

Types of work in the field of Non-farming activities can be divided into three categories:

• Regular work,
• Self-employment, and
• Casual employment

According to a study, about 27 million workers in the organized sector were underemployed in 2003. This proportion, on the other hand, has been steadily declining since 1998. According to studies, 92 percent of Indian employees labor in the unorganized sector, whereas the organized sector employs just around 8% of the population. As a result, the unorganized sector’s presence in India is mostly due to the informal tendency of agricultural and non-farming activities.

According to census data, about 42 million individuals in rural India work in non-farming occupations. This census constitutes nearly about 47 percent of the total non-farm employment of rural areas. Out of these, 17.30 million persons (which compose about 42 percent) have their own employment enterprises. The remaining 24.59 million (nearly 58.70 percent) worked as hired employees. Female employees account for about 10 million of the total population (around 21.96 percent). However, when compared to self-employed non-farm employees, the percentage of female workers for hired non-farming operations has been shown to be higher (24.32 percent) (18.59 percent).

Non-farming activities are increasing through the following efforts:

• One strategy to encourage more individuals to engage in non-farming activities is to provide financial support to help them raise the necessary funds through low-interest loans.
• The market for buying and selling products and services is expanding.
• Good roads and communication help to set up more engagement in the non-farming activities.