Executive Summary 

India’s recent rural story is one of both visible progress and persistent vulnerability. Rapid economic growth, extensive public programmes, and expanding civil-society and private sector engagement have begun to narrow parts of the rural–urban divide. Flagship schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), National Rural Health Mission (NRHM), National Rural Livelihoods Mission (NRLM), National Food Security Act (NFSA), Pradhan Mantri Awaas Yojana – Gramin (PMAY-G), Jal Jeevan Mission, and Ayushman Bharat have expanded income support, basic services, and social protection across the countryside. At the same time, Digital India and the Jan Dhan, Aadhar, Mobile (JAM) trinity have enabled a new generation of digital and financial inclusion. However, the country’s rural regions continue to suffer multidimensional poverty, climate risk, precarious employment, and uneven access to infrastructure and services.

Within this landscape, many of the most fragile geographies—tribal belts, drought-prone and rainfed areas, and salinity-affected regions—face entrenched challenges of low and volatile productivity, distress migration, degraded natural resources, and weak local institutions. Small and marginal farmers in these regions are highly exposed to greater climate variability and extreme weather patterns, soil degradation, and limited market access; seasonal and circular migration continue to underpin household survival strategies. These are also the contexts where climate change is already being felt as a lived reality rather than a distant threat.

It is in this setting that Reliance Foundation launched its Rural Transformation Programme. Its first phase in 2010–11 covered 560 villages across 27 clusters in 12 states, focusing on land and water development, productivity enhancement, farmer collectives, and local governance. The second phase, from 2019 onwards, scaled the effort to around 3,000 villages across 26 clusters in 11 states, and placed greater emphasis on convergence with Gram Panchayats and public schemes, strengthening community institutions and building resilience in a landscape approach.

Drawing on the learnings over the years, the programme continues across diverse regions of the country, with distinct focus areas and a common emphasis on sustainable and scalable outcomes across development domains. Many of the targeted districts are characterised by deep structural challenges, including soil degradation, erratic rainfall, large-scale distress migration, poor infrastructure, and limited livelihood opportunities. Within these contexts, the programme’s bottom-up, institution-building approach—anchored in decentralised planning and local ownership—provides a framework for enabling longer-term development processes.

This study, a collaborative effort between Reliance Foundation and Observer Research Foundation (ORF), examines how long-term, community-based interventions under the Rural Transformation Programme have shaped household well-being in four clusters: Balangir (Odisha), Mandla (Madhya Pradesh), Adoni (Andhra Pradesh), and Radhanpur (Gujarat). It evaluates the extent to which water- and agriculture-centred, institution-led interventions have enabled poor and vulnerable rural households to move out of poverty and build resilience, and explores the implications for rural development policy and practice. The study draws on primary data from a cross-cluster survey data collected in 2023, as well as background information from internal project completion reports from 2020 which reviewed the programme’s progress and impact in the previous decade.

About the Publication

The publication has two interlinked components. The first presents detailed development profiles and narratives for the four clusters. These chapters describe each cluster’s demographic, ecological, and economic context; key pre-intervention challenges; and the evolution of Reliance Foundation’s strategies over time. They document interventions in water security, sustainable agriculture, nutrition-sensitive initiatives, formation and strengthening of community institutions, including Village Associations, Self-Help Groups, and Farmer Producer Companies, as well as efforts to improve access to social protection, education, and markets. The cluster narratives anchor quantitative findings in lived experience and provide grounded illustrations of pathways to change.

The second component is an analytical assessment of household well-being and resilience, built on primary data from 2,141 households in eight villages (two in each cluster) in 2023. A structured household survey and village-level focus group discussions were used to reconstruct households’ positions on a locally defined ‘Stages of Progress’ (SoP) ladder for two time points—roughly 2014 and 2023—to understand how and why these positions changed. Across the four clusters, the survey covers 2,141 households—including 1,135 agriculture-based, 349 migration-dependent, and 91 female-headed households—distributed as follows: 1,016 in Adoni, 388 in Balangir, 297 in Mandla, and 440 in Radhanpur.

The analysis combines descriptive statistics, SoP-based transition indices, and econometric models to identify which households moved upwards or downwards, along which dimensions of well-being, and under what conditions. All quantitative indicators were constructed from primary survey data and community exercises, triangulated with official statistics such as Census 2011, state agricultural and socio-economic data, and NFHS, as well as Reliance Foundation’s own programme records. The report thus offers both a narrative and a data-driven account of rural transformation in some of India’s most challenging settings.

The ‘Stages of Progress’ Framework

Need for a Community-Centred Progress Index, Methodology, and Data Sources

Conventional income- or consumption-based poverty lines, and even standard multidimensional indices, often miss essential features of rural deprivation and change. Rural households face overlapping deficits in nutrition, health, education, water, housing, market access, and voice. These deficits interact with environmental fragility, caste and tribal marginalisation, and insecure work to create persistent poverty traps. Top-down indicators cannot always capture how communities themselves recognise movement from survival to stability and from vulnerability to resilience.

The Stages of Progress framework responds to this gap by placing community perceptions at the centre. Instead of defining poverty solely through externally set thresholds, SoP asks villagers to identify the key steps households take as they move out of poverty—for instance, securing two meals a day, getting children into school, clearing chronic debt, investing in housing or livestock, diversifying livelihoods, or reducing distress migration. Households are then classified into stages such as “Poor”, “Vulnerable to poverty”, and “Out of poverty”, based on these locally meaningful milestones.

In this report, the SoP framework is used to answer four core questions. First, how far have households in the Rural Transformation clusters moved across locally meaningful thresholds of well-being, over roughly a decade? Second, which dimensions of well-being—including income and consumption, food and nutrition, water security, institutional participation, and education—have shifted the most, and for which groups? Third, to what extent have the programme’s community-led, water- and agriculture-focused interventions enabled resilience among the poorest, landless, migration-prone and tribal households? Fourth, what is the role of local community institutions (such as village associations, SHGs, and FPOs) and how have they facilitated and supported improvements in well-being and sustainability?

The analytical framework combines the capabilities approach with the SoP methodology and standard empirical tools. The four clusters—Adoni (Andhra Pradesh), Mandla (Madhya Pradesh), Balangir (Odisha), and Radhanpur (Gujarat)— were purposively selected to represent diverse agro-ecological and socio-economic contexts, including semi-arid rain-shadow zones, tribal forested belts, drought-prone districts, and salinity-affected landscapes. Within each cluster, two villages with the highest number of households and sustained Reliance Foundation interventions were selected, and all families within the intervention circuit in these villages were surveyed, including female-headed, agriculture-dependent, and migration-dependent households.

The SoP process unfolded in two stages. First, focus group discussions in each village generated a locally grounded ladder of progress and the criteria for classifying households into three stages: Stage 1 (Poor), Stage 2 (Vulnerable to poverty), and Stage 3 (Out of poverty). Community members described the first signs of movement out of poverty—for example, food self-sufficiency, regular school attendance, improved housing, ability to avoid high-interest debt, or reduced reliance on distress migration. In parallel, national and international poverty lines were applied to identify households in extreme poverty, relative poverty, and consumption security, allowing cross-checks between subjective and monetary measures.

Second, a structured questionnaire captured each household’s SoP stage for two points in time (around 2014 and 2023), along with information on income and consumption, engagement with the interventions, participation in local institutions, access to schemes and services, and perceived changes in different dimensions of well-being. Movements between stages—including upward transitions such as Stage 1 to Stage 2 or 3, and regressions from higher to lower stages—were converted into a continuous SoP transition index, using a set of coefficients that assign higher scores to larger upward movements and negative scores to reversals. This index provides a concise measure of net household progress over the decade.

The empirical analysis has two layers. The descriptive layer tracks changes in income and consumption levels and composition, adoption of watershed works, water budgeting, and nutrition gardens, strengthening of community institutions, and linkages to social protection and markets. The econometric layer uses ordinary least squares models, estimated separately for each cluster, to explore the association between the intensity of programme participation and SoP transitions, after controlling for baseline endowments. It also examines whether female-headed, agriculture-based, and migration-dependent households experience distinct patterns of change.

Key Findings

Across the study clusters, there is clear upward mobility in three—Balangir, Mandla, and Adoni—alongside continued vulnerability. Radhanpur shows a more mixed pattern, with gains in consumption coexisting with a slight increase in households classified as poor or vulnerable. In Balangir, for example, the share of households classified as “Out of poverty” increased markedly, while the proportions of “Poor” and “Vulnerable” households declined. Similar patterns of improvement are visible in Mandla and Adoni, though the levels and trajectories differ by context. At the same time, when households are benchmarked against national and international poverty lines, a large number still fall into bands that denote vulnerability or relative poverty, meaning that modest shocks in prices, climate, or health could push them back into deprivation.

Between 2014 and 2023, the share of households classified as “out of poverty” rose from 64.7 to 84.8 percent in Balangir, from 7.4 to 60.6 percent in Mandla, and from 96.5 to 99.7 percent in Adoni, while in Radhanpur it declined slightly from 96.4 to 93.2 percent as the combined share of poor and vulnerable households increased from 3.6 to 6.9 percent. In Radhanpur’s, 71.8 percent of households are currently classified as “out of poverty” and 8.4 percent as “consumption secure” against national and international poverty lines. Still, almost one in five (19.1 percent) remain vulnerable to poverty.

Income and consumption patterns show clear deepening across all clusters, and in some—particularly Balangir and Radhanpur—a greater diversification of spending away from food towards health, energy, and other non-food items. The share of food in total spending fell slightly. At the same time, the proportions devoted to health, energy, and other non-food items increased, suggesting that households are spending more overall and can invest more in human development and productive assets.

Over the study period, average monthly household consumption expenditure increased by about 46 percent in Balangir, nearly 60 percent in Mandla, 45.7 percent in Adoni, and 71.3 percent in Radhanpur, indicating broad-based but uneven deepening of consumption across the four clusters.

The analysis highlights the central role of local institutions, alongside their limits. Women’s SHGs are widely present and are associated with improvements in savings, access to credit, confidence, and livelihood diversification. Village Associations and Village Development Funds have supported community-led investments in land and water development, agriculture and education, and have improved communities’ ability to plan and access public resources. However, participation is uneven: landless households, the poorest, and heavily migration-dependent families are often less involved and may benefit less from institutional platforms unless deliberate inclusion strategies are pursued.

SHG membership now covers 77.8 percent of households in Balangir, 68.6 percent in Mandla, 83.5 percent in Adoni, and 11.9 percent in Radhanpur, with 63–70 percent of women members in Balangir and over half in Mandla reporting greater confidence, participation in decisions, improved access to credit, and more diversified livelihoods. In Adoni, Village Associations have mobilised about INR1.96 crore in community contributions and leveraged an additional INR13.25 crore through convergence with public schemes via the Village Development Fund, underscoring the potential of local institutions to unlock larger-scale investments.^[1]

Sectoral outcomes are strongest where interventions in water, nutrition, and markets are layered. Watershed development, farm ponds, wells, check dams, and locally appropriate structures have increased water-harvesting capacity and irrigation coverage, raised groundwater levels, and enabled farmers to shift from risky monocropping to more diversified and productive systems. Nutrition gardens have reduced household expenditure on vegetables and improved dietary diversity, particularly during shocks such as the COVID-19 pandemic, when supply chains were disrupted. Efforts to develop local markets and link farmers to buyers through Farmer-Producer Companies are beginning to convert productivity gains into higher and more stable incomes. However, coverage and awareness are steadily progressing but need further consolidation.

In Balangir alone, more than 48 lakh cubic metres of water-harvesting capacity has been created, contributing to a 1.5-metre rise in groundwater levels and expanding irrigation across over 2,100 hectares.^[2] In Mandla, 27.6 lakh cubic metres of additional capacity has helped double cropping intensity from 90 to 195 percent and bring around 2,000 hectares under assured irrigation.^[3] Reliance Nutrition Gardens have been adopted by 68.9 percent of households in Radhanpur,^[4] with participating families saving about INR904 per month on vegetables and 17.2 percent generating income from surplus produce; in one Central Indian cluster, over 52 percent of households have adopted RNGs and report average monthly savings of about INR816, whereas in Adoni only 4.1 percent of households have adopted RNGs even though users typically save around INR1,180 per month.

Regression analysis across clusters shows that, after controlling for initial socio-economic conditions, stronger programme participation is positively and significantly associated with upward transitions along the Stages of Progress, particularly among households starting from lower endowments. This indicates that programme interventions have been effective in improving living standards, especially for poorer households. There is limited evidence of systematically different impacts across female-headed, agriculture-based, or migration-dependent households, highlighting the need for more targeted intervention design rather than uniform approaches.

Overall, the findings point to a process of convergence, with poorer households experiencing relatively larger gains and narrowing gaps in living standards. However, variations in impact across regions reflect conditional convergence, where outcomes depend on initial conditions and regional characteristics. Regions with lower baseline levels benefit more from interventions addressing foundational deficits, while relatively better-off regions show smaller marginal gains. These results underscore the importance of context-specific and differentiated interventions to sustain progress and promote equitable development.^[5]

Summing-up

More than a decade after the launch of the Rural Transformation Programme, the evidence from these four clusters suggests that integrated, community-led interventions centred on water security, sustainable agriculture, nutrition, and strong local institutions can drive meaningful improvements in rural well-being. Many households have moved from chronic poverty towards greater consumption security and resilience, with better access to water, more diversified livelihoods, improved nutrition, and stronger local organisation.

At the same time, the picture is one of partial and uneven transformation. The poorest deciles, landless families, migration-dependent households, and some female-headed households remain vulnerable. Institutional participation remains uneven and there is significant potential to scale innovations such as water budgeting and climate-smart agriculture. Gains achieved remain at risk of being eroded by climate shocks, health crises, or economic downturns, especially where social protection and risk-sharing mechanisms are thin.

The report therefore makes a case for deepening diagnostic-driven targeting, strengthening and democratising local institutions, and deliberately layering interventions—combining land and water development with nutrition, financial inclusion, social protection, and market linkages—to consolidate gains and prevent reversals. It also underscores that rural transformation is not a simple, linear story of poverty reduction, but a dynamic process of movement across stages, mediated by community agency, institutional support, and structural constraints. By using the Stages of Progress framework alongside quantitative analysis and rich narratives, this study offers a nuanced, empirically grounded picture of what works, for whom, and under what conditions in India’s community-led rural transformation, and points to directions for future policy and research.

Experiences across the four clusters, and similar work in over 20 locations, show that the road to Viksit Bharat runs through Atmanirbhar Gaon: self-reliant villages rooted in strong local institutions. As India moves into the next phase of rural development, the way forward lies in deeper convergence, stronger community capability, and equity-centred design and delivery. Technology enablement will be central. While digital tools, from mobile advisories and e-governance to AI-based forecasting and early-warning systems, are reshaping rural development, gaps in infrastructure, access, and literacy still risk reinforcing inequality. In this landscape, community institutions and platforms such as SHGs, FPOs, and village associations remain critical intermediaries. Looking ahead, community initiatives and especially women- and youth-driven models offer a promising pathway to embed digital and AI technologies in ways that are equitable, scalable, and sustainable, thereby strengthening rural institutions and accelerating India’s journey toward Viksit Bharat.

Read the report here.

Nilanjan Ghosh heads Development Studies at Observer Research Foundation (ORF) and is operational and executive head, ORF’s Kolkata Centre. 

Debosmita Sarkar is former Associate Fellow, SDGs and Inclusive Growth programme, Centre for New Economic Diplomacy (CNED), ORF. 

Soumya Bhowmick is Fellow and Lead, World Economies and Sustainability, CNED, ORF.

Saji M Kadavil is Senior Research Associate, Reliance Foundation.

Endnotes

^[1] Reliance Foundation, Project Completion Reports-, Adoni, Balangir, Mandla and Radhanpur (unpublished, March 2020)

^[2] Reliance Foundation, 2020

^[3] Reliance Foundation, 2020

^[4] Reliance Foundation, 2020

^[5] Robert J. Barro and Xavier Sala-i-Martin, “Convergence,” Journal of Political Economy 100, no. 2 (1992): 223–251.

• Developing and Emerging Economies
• India
• national rural health mission
• rural development
• rural development in india
• rural development programmes in india
• rural development schemes in india
• rural transformation programmes in india

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.

PREV NEXT