India is characterised by a very high population, more than 75% of which lives in the rural areas. Since agriculture is the predominant activity in the rural areas of the country, as much as 65% of the population depends on agriculture for its livelihood.
Marginal farmers (i.e., with landholding of below one hectare) and small farmers (i.e., with landholding of 1 to 2 hectares) accounted for 58.1% and 18.3% respectively of the total number of operational landholdings. The average landholding of marginal farmers and small farmers was 0.38 hectares and 1.43 hectares respectively.
Thus agriculture is mostly a subsistence level occupation for the rural community. Consequently poverty is more pronounced in the rural areas and it is estimated that about 30% of the rural population is below the poverty line. Poverty line refers to the minimum income which is required to sustain oneself.
This is decided by Central Government. Till 1997 such minimum income level was decided at Rs. 11,000 per family in rural areas on all-India basis. In 1997, Government revised the limit upwards and notified different income levels for different states and that too, on per capita basis.
The pressure on land has increased and it has become imperative to take urgent steps to move people away from land-based occupations and to provide them with employment in the secondary and tertiary sectors.