Covid-19 and the Changing Rural Landscape

Covid-19 pandemic has impacted not only the urban world of towns, cities and metropolitan areas, but rural areas too. A lot of people think that villages are unaffected by the pandemic, and that only the cities are suffering stoically. That’s not true, although there are rural pockets where the problems are less pronounced.

The pandemic has disrupted rural life all around the country, resulting in price rise and supply shortages. There is also more pressure on employment.

Till recently, migration to and education in big cities was seen as the way to grow in life and career. It was also seen as the way, by marketers, for rural people to adopt the consumer-oriented lifestyle. However, the pandemic has altered all of that. It has altered the way rural people look at big cities, and how they negotiate their dependence on cities.

The pandemic has also caused the suspension of village fairs, and disrupted transportation. This has affected both buyers and sellers. While there has been a relaxation in lockdowns and permission is given for transportation of goods, it has not altered much for the rural areas. Reopening has been noticeably slow. All of this has, although not completely, reduced the dependence of villages on the nearest urban centers. There is a stark lack of healthcare in the villages, and this adds more fear to the already fearful rural populace.

All of these are leading to important and gradual changes in the rural landscape. If the current trend continues, it can alter the economic changes seen in the last 20 years!

Economic impact of Covid-19 on rural India

Let us now see what these changes are.
First of all, there is a marked decline in migration from rural areas to the urban ones. This has affected most avenues of employment, which has increased the dependence on agricultural work and National Rural Employment Guarantee Scheme.

Secondly, not all businesses are down in rural areas and in smaller towns. Establishments which cater to day-to-day needs of people are seeing a sharp increase in business since people are not able to travel to cities for their needs.

Thirdly, there is a huge increase in the demand for loans. This is partly, but to a large extent, caused by the formal banking sector unwilling to give new personal loans. Loans, therefore, right now is given only by pawnbrokers. Occasionally, some branches of NBFCs are giving loans. However, loans from pawnbrokers and other informal moneylenders is the sole source of credit right now for the rural areas. Gold loan demand is on the rise, and lenders from both the organized and the unorganized sectors are more than willing to help.

Fourthly, there has been a quick drain of employment opportunities. While this has hit both urban and rural areas, the latter are worse off since they majorly rely on cities for work. This has forced the rural populace to take up petty trade to earn their daily bread.

Fifthly, the number of people in rural areas, especially whose with land holdings, is investing milch animals. There is an impression that this shall bring additional income. These are being purchased with gold loans. Petty commodities like milk and animal husbandry are in increased demand. For rural families, these are price ways to earn right now.

Lastly, shared public transportation is on the decline, but there is a growing demand for two-wheelers. 

What does it all mean?

It is still not clear how much these changes shall affect the rural life. It all depends on how fast the cure reaches villages around the country. However, one change will have a permanent effect: the rise of importance of petty commodities to get income in rural areas. At the end of the day, no one knows how long these changes shall last, whether their effect shall be good or bad.