Published Paper Details:

Despite high overall economic growth rates in many Asian countries in the past two decades, many policy makers in Asia and in international organizations have become increasingly concerned that this growth has been too uneven and often accompanied by rising income inequality. In addition, it appeared that disadvantaged groups, people in remote rural locations have not benefited proportionately from this rapid economic growth. Agriculture continues to play a predominant role in influencing the overall performance of the Indian economic. Agriculture is the main occupation for majority of Indian population. Indian agriculture has been passing through a phase of serious crisis. The crisis in agriculture has many manifestations, of which suicides of farmers one. An important cause of this crisis is the lack of alternative opportunities in the rural areas. According to an NSS survey on Some Characteristics of Agricultural Households in India 50 percent of the members of the agricultural households were estimated to be either unemployed or out of labour force during the survey period. How can the problem of this agrarian economy be solved? How can the rural population be brought into the mainstream of the process of economic growth by providing an alternative source of employment for them? These are some of the questions that need probing. The answer lies in providing alternative employment opportunities to this section of the society. The rural non-farm sector plays a vital role in promoting growth and welfare by slowing rural-urban migration, providing alternative employment for those left out of agriculture, and improving household security through diversification. The non-farm economy has been gaining a wider acceptance in issues of rural development due to its positive implication in poverty reduction. According to a World Bank report non-agricultural activities account for 30 percent to 50 percent of income in rural areas. In view of this it is important to understand role of the non-farm sector particularly in the rural areas in solving many of the problems of rural economy such as poverty, unemployment and rise in income. What is the role of the rural non-farm sector in generating employment for the rural unemployed? Or alternatively, to what extent can the growth of rural non-farm sector help in promoting entrepreneurship in rural areas? Can the growth of this sector bring rural vulnerable section of the society in the mainstream of the process of economic growth? The present study is aimed at answering these questions.