Despite of the relative satisfactory performance in some of the macroeconomic variables and spending thousands of crores of rupees for rural development programmes aimed at improving the nation's social indicators, large part of the rural population still lack access to basic services in health, education, clean drinking water, sanitation and housing. The problem of rural economy cannot be viewed or tackled in isolation from changes affecting the urban landscape. A comprehensive and integrated strategy is required. The natural growth of urban areas will make this trend inevitable unless bold steps are taken to promote an alternative, more geographically dispersed and equitable development paradigm.