The main aim of economic reform is to reduce poverty, increase employment and betterment of living condition of the poor, between 1972-73 and 1993-94 the continuing unemployment rate among rural and urban communities, between in 1972-73 2%, 1993-94 2.8% in rural India and between in 1973-74 4.5%, in 1993-94 6.5% in Urban India, their poverty is reflected by their earnings rather than by their unemployment status(Jha, 2000). Majority of population is living in rural areas in 2001 total population was 102.9 crores where rural population was 74.3% in 2011 total population is 121.0 crores where rural population is 83.3%, India’s overall literacy rate in 2001 was 64.8% where as in rural area it was 58.7 and in urban areas it was 79.9 in 2011 total literacy is 74.0% where rural literacy is 68.9% and urban is 85.0%.(Chandramouli, 2011)
Economic reform in India was crate regional difference among state to state and rural to urban in terms of socio-economic development, Most of economic reform have been followed in to Industrial sector as outcome of this economic reform would have wide regional difference and changing income distribution between state this income difference create income inequality and poverty among sates and among rural and urban, economic reform more urban based this changes of growth resulting many problems in urban-rural areas, In India after the 1991-92 the poverty dropt comparing to before 1991 (1993-94, & 1999-2000 period 1 & 2) in the 1st period of economic reform the deference of poverty between urban & rural was little but in the second period it was big gap between rural and urban, in the same period between the state also poverty and urbanization, rural problems pointed in out(N.R. Bhanumurthy and Arup Mitra, 2014)
Table1. Growth in Real GDP (&) per annum
2011-12 to 2015-16 (NS)
NS: New Series with 2011-12 base
Note : New Series refer to Gross value added (GVA) at basic prices; 2015-16 numbers are advance estimates; Numbers upto 2000s are based on 2004-05 base, GDP at factor cost.
Source: Author’s estimates for 2011-12 to 2015-16 based on Central statistical Organization Data. Panda 2013 upto 2000s
The Above table clearly indicate that growth of agriculture sector and industrial sector as we know the industries are established in urban area where the employment and earnings& wages are high compare to the rural areas and agriculture sector was growing slow which crated income inequality and poverty, and in agriculture area from last year its coming down which is the main source of income for rural India the above table indicates how the gap between the urban and rural communities in equal in India.
Table 2 Urban and rural literacy rate in India since 1991-2011
Gap in Literacy
Source: Census of India. Ministry of Home Affairs Government of India. 1991-2011data.
The table no 2 shows that the literacy rate in India still we are not reached up the expectation from 1991 to 2011 hug gap between the urban and rural 1991, 2001,2011, the gap was 31%,21%,17% respectively, it is literacy difference among rural and urban.
Table 3 Poverty Line in 2011-12
Monthly Per Capita
Monthly Per Household
Per Year per House Hold
Monthly Per Capita
Monthly Per Household
Per Year per House Hold
Source: Government of India 2009. Government of India 2014.
This table indicates that the income and expenses of people among rural and urban whereas rural people are earn less income and their expenses also very less compare to urban areas it shows the distribution of income in India.
Table 04: Poverty Ratio and Number of Poor: Expert Group ( Lakdawala) Method 2009
Poverty Ratio %
2011-12 (Dr. C Rangarajan Report Planning commotion chairman 2014)
Sources: Government of India, Planning Commotion Report 2009-2014.
Table 5 Poverty in 2016-17
Rural and Urban
Per Capita Per Month Rural
Per Capita Per Month Urban
Source: Perspective planning Commission, Government of India New Delhi
The above tables table number 04 % 05 respectively shows that the poverty ratio among rural and urban communities after economic reform also we are not achieve the equality in poverty and income distribution in India.
Data base analysis between rural and urban:
The above tables from table number 1 to 5 are shows that, various factors which affect the poverty and income inequality among urban and rural people, in India. More than 70% of population is living in rural area. Ruralpeople are more depended on agriculture and related income, but economic reforms mostly concentered on urban areas and industries, which was marked in number of development at the same time invisible pains also erupted, the above data clearly shows that, the economic reform and post period of reform was effected rural areas and their income which Cause poverty. Income inequality, slow growth of literacy, problem of rural employment, low quality of life many moreproblems were pointed out where compare to urban areas rural peoples were more effected by the economic reform in India.
Due to economic reforms in India created vistas for urban development and industrialization. En numbers of job opportunities have been created and new technologies have adopted.In mean time the people from rural area used to migrate to urban area for seeking livelihood, for doing so urban areas filled with huge population hence, different problems were raised in urban area. In other context rural areas were affected due to urban centered economic reform. The rural economy being neglected, even though, the rural sectors contribute more for Indian economy. The negligence created lack of innovative technologies in agriculture, downfall of agriculture market, diminishing value for domestic industries these are all causes for unemployment in rural areas intern it led to poverty.
The Government of India made number of policies and programmes to improve the agriculture sector but sill it is not up the level of expectation the economic reform was completely neglected area therefor exclusively agriculture reform is necessary to meet the expectation of present and upcoming population in the country. Importance must be given to the agriculture sector in all future reforms because the agriculture sector will create many jobs; this sector also includes the rural industrialization cottage industries homemade industries and overall rural development. This will be rise income of the formers and rural labours on sustainable form. There is one more urgent need to raise public investment in the field of agriculture. Some important area need investment is irrigation, watershed development, rural infrastructure, housing, sanitation, employment; drinking water this will help the income equality among rural and urban.
With the agriculture reform we need to look after about good governance, the prime objective of the government should be welfare of the natation not only the development of the nations this two concept are similar but this crate cap between the rural and urban and rich and poor in the country, in future economic reform should be more people center to enhance the capacity of the population and need is to enhance the social empowerment in quality basis of the marginal groups of the society. This will be the economic growth of the nation and also it reduce the gap between rich and poor urban and rural poverty and income inequality will be reduce, through capacity building skill development crating job and business environment and helping rural people not only in agriculture but also business industries trade etc., for this changes and development we need good governess with corruption less and selfishness.
The pains and gains of the new economic reforms was pointed many changes and development in India. The economic reform was created remarkablechanges in Indian economy. Which was welcome, but some of inequality created unknowingly that should be rectified through the future policy implications. The post economic reform period was not bad, with respect to potential problems of growing. Economic reform has done better, it’s very clear there are policy improvement that can help future in managing income and development among rural and urban. The new reform must have long term vision of transforming country in to world economic power in coming days; also government should giveequal priority to urban and rural, poor and rich in the country.