A new but more realistic approach to rural development is presented. It criticizes the efficiency bias of development policies which tend to ignore distributive justice or equity resulting in lop-sided developments. The small farmer and small enterpreneur in the rural sector gets ignored in the formulation of development policies and rural developments fail to achieve its desired goals. Existing development programmes have also not shown desired results for a variety of reasons. It proposes certain organisational changes in planning and implementation structure which is more close to the local requirements. It suggests measures for raising rural labour productivity and rural incomes.