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What role do markets play in the expansion of non farm activities?
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What role do markets play in the expansion of non farm activities?



Role of Markets in the Expansion of Non-Farm Activities
Market access is crucial for the expansion of non-farm activities in rural areas. Markets play a significant role in facilitating the growth of non-farm activities by providing opportunities for small-scale entrepreneurs to sell their products and services. Let's delve into the details of how markets contribute to the expansion of non-farm activities.

Increased Demand
- Markets provide a platform for non-farm producers to reach a wider customer base, leading to increased demand for their products and services.
- This increased demand encourages entrepreneurs to expand their non-farm activities and invest in improving their productivity and quality.

Access to Inputs
- Markets offer non-farm producers access to a range of inputs such as raw materials, tools, equipment, and technology.
- This access to inputs enables entrepreneurs to enhance the efficiency and effectiveness of their non-farm activities, ultimately leading to higher productivity and profitability.

Income Generation
- Markets create income-generating opportunities for non-farm producers by providing a platform to sell their goods and services at competitive prices.
- This additional income allows entrepreneurs to reinvest in their non-farm activities, expand their businesses, and create employment opportunities for others in the community.

Market Linkages
- Markets help establish linkages between non-farm producers and other actors in the value chain, such as suppliers, distributors, and retailers.
- These market linkages enable entrepreneurs to access new markets, diversify their product range, and establish long-term relationships with key stakeholders, fostering the growth of their non-farm activities.
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Financial inclusion plays a crucial role in inclusive development and sustainable prosperity as is being increasingly recognised and acknowledged globally. Large segment of population need to be part of formal payment system and financial markets. Financial inclusion would also broaden and deepen financial savings and lead to higher economic development.Previous initiatives: While financial sector policies in India have long been driven by the objective of increasing penetration and outreach, the goal of inclusion has eluded us. About 41 per cent of adult population remain unbanked and the number of loan account covers only 14 percent of adult population. The previous initiatives included (i) the expansion of network of cooperative banks to provide credit to agriculture and saving facilities in rural areas, (ii) nationalism of bank in 1969 and expansion of branches and (iii) creation ofan elaborate framework of priority sector lending with mandated targets as part of a strategy to meet the savings and credit needs of large section of the Indian population who had no access to institutional finance. Given the sheer enormity of the challenge, however the outcomes of these efforts have so far been mixed.Recent initiatives/out of the box approaches: Recent initiative include (i) “no frill” account for retail purpose; (ii) simplified KYC (Know Your Customer) (iii) Credit counselling centre facilities; (iv) use of NGOs and formation of SHGs; (v) Kisan credit cards service and (vi) extension of smart cards. The finance Minister in his Budget Speech of 2007-08 also laid down provision for funding of financial inclusion goals. The Rangarajan Committee also spelt out priorities for meeting financial inclusion objectives. Two of the more important approaches in the recent times included the use of technology such as smart cards and mobile telephone banking. The potential for their spread can be vast especially in combination with banking correspondence approach launched recently.New entry and competition: In addition, new competition and entry also play crucial roles, as is evident from the global experience. Two particular initiatives have included the role of Micro Financial Institutions (MFIs) and Non-Bank Finance Companies (NBFCs). MFI activities have surged in recent years, but has come under scrutiny and regulation. Services expanded at a fast rate, providing access on better terms than the alternatives of traditionalmoney lenders. However, better regulation is also needed. On NBFCs, gold pawn establishment have also provided alternate access and are fast expanding in urban and semi-urban settings. As far as caps on interest rates are concerned, as in case of other products, ‘subsidies’ in the form of low interest are often an inhibitor of access to services because of rationing and misuse.Financial Literacy: Any policy initiative seeking to afford greater access to financial services to financial services to a large segment of the population must necessarily address bridging the existing knowledge gap in financial education and literacy. Over the last decade or so, researcher all over the world, especially in the developed countries, have, therefore, started to study and explore whether individuals are wellequipped to make financial decisions. Financial education and literacy assumes urgency in any given scenario.Q.Which of the following is not one of the previous initiatives for financial inclusion?

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What role do markets play in the expansion of non farm activities?
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What role do markets play in the expansion of non farm activities? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about What role do markets play in the expansion of non farm activities? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What role do markets play in the expansion of non farm activities?.
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