A big part of India’s population was and still is dependent on agriculture. Past reform or post-reform, agriculture has always been the backbone of the Indian economy. But due to lesser opportunities, there were more people in agriculture than needed.
The same output can be produced with lesser manpower, but they are busy with agriculture which was a loss for both rural India and these families. And indirectly it is slowing down India’s GDP growth. This was an issue in rural India, urban India has their own issue. But what does rural India need? Opportunities.
1991 economic reforms encouraged new industries to invest both in rural and urban India. Then the population which was forcibly in agriculture started coming out and starts working for these industries and increasing their family income. Before that, these families have just one income source but now they have multiple income sources. It pulls them out of poverty, and now they can think of more than just earning a livelihood.
Now they can think of living a better lifestyle. Which encourages businesses to set up their business in rural areas. Because now they can get a good amount of return on their investment. All businesses and industries work for profit, they didn’t enter the rural market until they make sure they will earn a profit.
Nowadays rural areas have showrooms, private institutions and much more, all of this because now they have multiple income sources. Now they have the availability of technology, better fertilizer with which they can have maximum productivity, and a security cage as MSP (minimum selling price). MSP is determined by the government which is the minimum price they will get for their crops, if not government will buy it from them.
1991 economic reforms, which took 3 major steps, liberalization, privatization and globalization. It will get very long if we get into details. But in short, what these steps did for India are increased investment and introduced advanced technology. There was a time when the crops used to fall short just for Indians. But now it is not just enough for India but we are now also exporting it to other countries. Rural India relies on agriculture and India relies on agriculture. In the fiscal year 2020-2021, 16.38% of India’s GDP is from agriculture.