ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Rural Economic Growth and Emerging Pattern of Rural Towns

The two features of structural transformation visible in India are an increase in the overall gross domestic product and per capita incomes, enabled by the shift away from agriculture to other sectors or occupations with higher productivity; and greater urbanisation. An attempt is made to examine the emergence of small towns or urbanised villages in Gujarat and Rajasthan. The states depict a disparate pattern of rural economic transformation and varying levels of urbanisation. The emerging urban hierarchy is contextualised within the process of economic growth and transition, and the composition of urban growth along with the locational features of the emerging towns are studied. The underlying causes responsible for the nature of urban growth in the two states highlight the need for a regional focus of policy.


Structural change is depicted by growth in the gross domestic product (GDP), increase in the share of non-agricultural ­income and employment, and increase in wage rates and overall productivity. It is accompanied by population growth, changes in the demographic structure, including rural–urban population distribution, rising education levels, and ­developments in the communications sector that increase the exposure to the outside world. Rural economic transition is ­associated with urban centres growing and engulfing surrounding rural areas.

In the countryside, the demographic changes exert pressure on arable land, common land and water resources. Changes in the production technology along with mechanisation of ­agricultural occupations release the labour hitherto engaged in primary activities for work outside the agriculture sector. Such a shift towards non-farm activities has been the central feature of the social and economic change in recent decades. Thus, structural transformation is marked by an increase in overall GDP and per capita incomes, enabled by the shift towards sectors with higher productivity and greater urbanisation, with reduction in the proportion of the population residing in rural areas.

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Updated On : 8th Feb, 2021
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