VP singhji,
There is no denying the fact that development of rural India leaves much to be desired. Though some good developments did take place post independence like land reforms and the green revolution, but the cumulative effort has been much less than what was required. Having said that, I consider your diagnosis of the problem in "urban vs rural" terms as flawed. Rural India is not under-developed because the emphasis has been on urban India. It is underdeveloped because there are far too many people subsiding on land than is possible.
I'd instead argue that the problem with rural India is because of the failure to develop urban Indian properly. Can we name one planned city that the govt. has come up with since independence? The likes of Gurgaon are extensions of existing cities. I am talking about stand alone cities built from the scratch. Through out the history of mankind, development has taken place around cities. All civilizations built cities which became the nerve centers for economic action for them. A village in itself just doesn't have the numbers for making any big project economically feasible. Just imagine a big hospital or a big mall or a university opened in a village. Where would the demand be to justify the investment? These things have to come up in the nearest town/city, which need to be well connected to the villages through roads, telephones, etc.
Population of India is 1.2bn, of which more than 70% live in rural India. Majority of these are involved in agriculture. This is more than 3 times since independence. So number of people living off the land has tripled, while the amount of land has remained almost the same. This is just not sustainable. When a peon earns more than a farmer, it just tells you that there are far too many farmers than is economically feasible. People understand that and hence you see mass scale migration to the cities.
On the other hand, the developed countries developed themselves on back of rapid industrialisation. As per wiki, in 1870, 70-80% of US population was employed in agriculture. Now that percentage is like 2 to 3%. Farmlands have become much bigger thus giving economy of scale to the farmer. Even in 1950, one US farmer supported around 15 citizens. By 2000, that number was close to 150. Compare this to India where one farmer is supporting less than 1.5 citizens including himself in 2010. This link has good information on development of agriculture in the US. We don't have to follow US example, but if you look at any developed country, the results would be similar.
http://www.csrees.usda.gov/qlinks/extension.html
The other issue is that the Indian state had been so busy making everything from soaps to steel that it didn't really have resources to concentrate on what should have been its priority- public goods like health, education, infrastructure. Plus it didn't have the money. Given the high growth of last decade and a half, the money issue has been sorted. The tax revenue to the govt. has increased a lot. The onus is now on the govt. to stop wasting money on wasteful subsidies and use it to build the infrastructure.
The issue is not with people migrating to the cities. That is a natural outcome of the inequilibrium between rural/urban economies. The govt. needs to plan for this migration. They need to build new cities that can absorb the rural population and provide them with means of livelihood apart from agriculture. The extension of the current cities should be planned and not haphazard like it is now. And most importantly, what is needed is to develop the skill-set of rural communities so that they have options other than agriculture. Uneducated rural migrants end up in the usual unskilled/semi-skilled jobs in cities. Instead, they should be imparted with skills that can be used in the manufacturing/service sector.
The topic itself is very broad in its scope. My write-up merely touches upon some key points.
