The Rural Worry

Context: Amid pandemic, rural India, i.e. Bharat, is struggling on many counts.

Challenges to rural India

• Impact on agricultural economy: Spread of the pandemic might affect activity, both on the field and in mandis. This will have an impact on both output and demand.
• Rise in unemployment rate: The unemployment rate in rural areas has risen sharply in recent weeks to double digits, according to the Centre for Monitoring Indian Economy data.
  • Disruption in economic activity in urban areas has once again resulted in mass reverse migration, adding to the unemployment numbers.
  • Higher unemployment and lower remittances are expected to keep demand in rural areas muted.
  • Under the Mahatma Gandhi National Rural Employment Guarantee Act, about 27.3 million households demanded work under the scheme in April this year compared with 21 million in 2019-20.
• Rising rural wages: Migrant workers from the agriculture sector may also have gone back to their villages like last year, pushing up rural wages.
  • It is likely that rural India will see a large labour demand-supply mismatch in different areas, which can affect production.
• Near absence of medical infrastructure:
  • The requirement of registration and appointment for vaccination has put a large chunk of the rural population in a disadvantageous position.
  • There is also a fair bit of vaccine hesitancy.

Way Forward: As the vaccine supply improves, the government will need to make sure that rural India gets its fair share and vaccine hesitancy is adequately addressed.