posted on 2024-09-05, 22:24authored byMridul Eapen
The issue of rural economic diversification as a critical component
of rural transformation in less developed economies, has assumed
considerable importance in the development dialogue since the seventies.
Given the failure of the industrialisation led development strategies to
"trickle down" to the rural poor, a need was felt for restructuring the
development strategy of the fifties. The agricultural-rural sector was to
be regarded as having greater flexibility in absorbing labour and
generating extenstive growth, rather than as a sector passively supplying
labour to an urban based industrial sector. While the labour absorption
capacity of agriculture in the aggregate appeared to be limited, it was
the creation of non-agricultural activities, in particular rural small-scale
manufacturing enterprises, that was more crucial in the restructured
strategy. An issue which came to be much debated in this context was: Is
the process of rural diversification primarily agricultural-rural induced
or did the impulses lie outside the rural economy? Our study also
addresses this question in an attempt to examine structural transformation
of employment, spatially, over the period 1971-91 in Kerala. This state
is unique in many respects among the states of India, one of which is its
settlement pattern, characterised by a rural-urban continuum. Applying
the "continuous method" to study spatial change in the occupational
structure across rural, small towns and large urban units (comprising of
cities/big/medium towns and agglomerations), we find that economic
diversification in general and manufacturing in particular, has been fairly
rapid in rural areas. Within the latter, some rural settlements, numbering
about 128 villages, were transformed into urban areas during 1971-91.
An examination of certain socio-economic characteristics of these
villages, which can be used as proxies for "agricultural-rural" and "urban"
linkages reveals that, in fact, both types of linkages play a dominant role
in economic diversification depending on the location of the village visa-
vis large urban units. In other words higher agriculture linked indicators
are associated with highly diversified "isolated" villages while urban linkages determine the growth of non-agricultural activities in extensions/
outgrowths of urban agglomerations.
JEL Classification: J 21, O18
Key Words: Diversification, non-agricultural employment, linkages
History
Publisher
Centre for Development Studies
Citation
Eapen, Mridul (1999) Economic diversification in Kerala : a spatial analysis. CDS working papers, no.293. Trivandrum: CDS.