Impact of Market Economy on Indian Villages

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Impact of Market Economy on Indian Villages

The pace of change was accelerated by the beginning of British hegemony and the process of modernization that followed. The colonial vested interests imposed a new type of capitalist economy in agriculture under the British rule. Land also became a commodity and property. A new type of land revenue system was introduced to promote monetization.

 When we look at the villages of India, we find that the traditional rural economy was primarily a subsistence oriented economy, aimed at meeting the consumption needs of the local population. The jajmani system was the basis of economic organization. Under this, people of different castes were involved in the exchange of goods and services according to local customs, but it is also true that the market played a minor role in this subsistence based economy as well.


The people were local, informal markets were held in different periods, but there was more emphasis on socio-cultural activities than on formal economic deals. There was also the possibility of establishing inter-relationship between groups of villages in the Haats held on fixed duration. Economic exchange in such markets typically resembled redistribution or barter. Thus it can be said that a limited amount of cash economy and market exchange has been running in pre-industrialized urban centers in India since medieval times.


 Along with this, the process of agriculturalization and agriculturalization was also observed, especially among the tribal communities, the system of determining land revenue was implemented by the British rulers, under which the rent had to be paid in cash. This led to the rapid start of garnering maximum cash from their crops or producing commercial cash crops. Thus the rural economy was also the beginning of the spread and monetization of the market economy to the Indian villages, linked to the urban and later the national economy. After independence, modern means of transport and communication were started by the government. This campaign was run largely under economic development programs, so that


The market economy extended completely to rural India. Along with this, everyday items available in urban markets like soap, toothpaste, hosiery etc. became available between villages and towns. On the other hand, poultry items (eggs, rooster etc.) from a village in North India have reached the market of the metropolis from far away areas. With the becoming a wealthy class in the farming society, there has been a huge demand for comfort goods in the villages as well. AR Desai in his seminal contribution mentioned four major characteristics or trends of change in rural India (a) rapid transformation of agrarian society from a subsistence based economy to a market economy (b) rapid change brought about by the adoption of modern technology ( c) Decline of middlemen such as Zamindars and Bisveddars Now the main objective behind agricultural production became to grow surplus crops to be sold in the market. This paved the way for greater penetration of market forces. It also encouraged consumption oriented lifestyle among the rural people.


 Consumption of goods manufactured by urban mechanical method and keeping them in the house became status symbols. Thus, rural transformation driven by market economy can be described in the following form. (a) The new market economy created a new class of rich farmers, big traders, petty officials and political activists. (b) It also led to the establishment of a large number of new facilities, especially credit facilities. (c) Now credit cards have also reached the rural society. (d) Now better materials like tractors, water pumps, harvesters etc. are also being used. (d) The gap between the rich landowning class of agriculturists and the extremely poor landless laborers deepened. (f) Monetization has increased opportunities for social mobility. This had a profound impact on traditional social institutions like the joint family. Due to the different ability of different members of the joint family to raise income, the practice of establishing small families started.

Contemporary Indian society (g) This led to the practice of occupational mobility and adoption of a new occupation. (h) The rise of occupation-free caste structure, which dealt a severe blow to the traditional jajmani system. (i) Ethnic barriers to economic development and mobility

and new opportunities for health services and education are entering rural life. (v) It has also promoted women empowerment directly and indirectly. Of all these features, some recent events have been the most talked about. These incidents are of the agrarian distress caused by dependence on agriculture and the suicides of farmers due to it. These suicides are also a matter of concern in the areas of Green Revolution like Punjab, Haryana, Karnataka, Andhra Pradesh etc.


a . R . Vasavi (1999), while analyzing the mystery of farmer suicides, has told that there are some common trends and reasons for this. He has rightly said that the promotion of cash crops through the use of hybrid seeds, chemical fertilizers and insecticides in the semi-thriving regions has had many adverse consequences. Overall, there is a lack of coordination between the ecological specificity of those areas and commercial agricultural practices. There is increasing uncertainty and risk in agriculture due to changes in climate, especially rainfall, due to which agriculture is becoming a victim of “ecological crisis”. The economic crisis along with the ecological crisis has made the situation worse.


Commercial agriculture, however, is conducted on the basis of the use of external raw materials, but the institutional credit for purchasing these raw materials is available in very limited quantities to the farmers (mostly large landowners). . Most of the farmers take huge loans to do commercial farming. Since the small and marginal farmers do not get immediate and easy access to institutional credit, they are forced to adopt modern agriculture or take loans from private moneylenders at high interest rates to continue the farming business. They also get easy loans from local moneylenders and moneylenders who thrive on interest-bearing. In the era of ecological crisis, such farmers have to take more loans due to pest attacks or diseases in their crops. The introduction of commercial agriculture in basically dry agricultural areas has had an impact on the social fabric as well. In this type of agriculture, the principles of local or indigenous knowledge and caste and kin relations do not help. In such farming, the role of agents and agencies of agribusiness and agricultural extension workers remains prominent and there is no question of traditional institutions providing information. Its disadvantage is that these external elements often do not pay any attention to the interests of the illiterate farmers. Huge price fluctuations are part of the market economy and add to the problems.


Farmers are left alone due to high cost of production in the absence of fixed procurement or support price by government agencies. Farmers also complain of rampant adulteration of pesticides and no guarantee of new varieties of cash crops seeds. When two consecutive crops fail, the farmers’ kiln sits. Changing agricultural practices, decline in government and administration support, diminishing power of farmers against market forces, increasing risks in agriculture and lack of community support can easily be gauged by how much farmers are getting. You will have to face personal stress.


 In the event of crop failure or extreme fluctuations in prices beyond their control, the capital attack on farmers without any support for security destroys small farmers and makes them poor. Just as the incidents of suicide are a symbol of the despair spread in an area, similarly the deprivation of the food grains eaten to survive should also be taken seriously. As Susan George (1985) pointed out, the disappearance of staple cereals in a given area without an adequate alternative economic base is a threat to food security and also makes local communities vulnerable. Thus the incidence of suicides is directly related to the economic factors associated with the market economy.


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