Rural Industrialization Can Only Boost Agrarian Economy

By Khan, Rao Abdul Rauf | Economic Review, August 1997 | Go to article overview

Rural Industrialization Can Only Boost Agrarian Economy


Khan, Rao Abdul Rauf, Economic Review


The core of the cause of poverty as conceived by the leading economists is the absence of assets among a considerable large number of people. The fact is that the present system of land distribution has to be brought at moderate level with well defined and meaningful land tenure system in order to reduce the level of destitution. It is in fact the germs of inequality that results in poverty which in turn accentuates inequality. The land reform introduced in piecemeal formerly has enough loopholes which has to march through. The numerous ameliorative measures adopted recently can undoubtedly bring realistic result if work on the allotment of agricultural land and other assets are transferred is done in real terms and fruit of it reaches to real landless tiller of the soil and the poor. The only hope of array lies in bringing a real national renaissance where rich and powerful gives up a part of their wealth and most of their power so that the poor get the real freedom to organize themselves and fight against their exploitation. We in reality lack in making commendable headway in technological development in the absence of which linking of agricultural produce with agro based industries will be meaningless as without creating effective demand for marketable surplus neither volume added produce nor tempo in diversified pattern will increase. The present democratic regime has considered as key element in the strategy for tackling effectively the problem of rural employment by giving impetus to rural industrialization. The problem of rural and unemployment is indeed both massive and complex. There are no easy ways in which it can be tackled. No strategy will give the desirable results unless long range perspective plan under economic decision is formulated. The overall development strategy ought to be so designed that it promotes a vigorous growth of the economy which can generate stronger trickle down effects, combining it with carefully worked out target oriented programmes. The various incentives given to both entrepreneurs and the agriculturist for revival of various enterprises and sick units by fixing higher support price of major food and cash crops and bringing reduction in fiscal measures may prove as incentives for boosting production for time being. All this requires a long term dispassionate policy measure. This is necessary as we have already wasted our 50 golden years in achieving balanced growth by testing various models. See how South Korea, Malaysia and Indonesia have made breakthrough in both agriculture and the industry.

Its Significance

In a developing country with abundant manpower, rural industrialization has a pivotal role to play in the development strategy. Small rural enterprises have certain distinct advantages in higher labour intensity, processing local available raw materials and meeting consumers needs and at the same time act as breeding grounds for modern entrepreneurs. The efficiency of small rural enterprises can be improved by realizing standard production through adoption of labour intensive techniques under free economy set up. The involvement of public sector need to be done away with. The persistence of small enterprises in developing countries (DCs) and LDCc is a positive proof they have something inherent and basic in them and they operate successfully.

One of the most perplexing problems facing a number of developing countries is that of un-employment. Industrialization, it is generally thought, has not done its share to absorb labour. It appears that the technology which is used early in the industrialization process is capital intensive, borrowed from the advanced countries. in the opinion of many, a part of the answer to the unemployment problem lies in adopting technology that involves less capital and more labour in a most efficient manner. If the businessman behaves like an "economic man" as explained by Lous T. Wells in his article Economicman and Engineeringman he should according to traditional wisdom choose and intermediate or a labour intensive technology when operating in a less developed country with low wage rates and high capital costs. …

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