Rural industrialisation in Kerala : re-examining the issue of rural growth linkages

The main purpose of our paper is to re-examine the role of linkages in a process of rural industrialisation (RI) deriving from the field experience in two purposively selected, newly emerging areas of industrial growth in an industrially backward state. While considerable evidence on survival of manufacturing activities in rural areas, particularly an agriculture-linked process of rural industrialisation, was not very encouraging, our perserverence arose out of (a) what we perceived as a rather narrow view of intra-spatial linkages in most of the studies taken up; and (b) the possibility of its greater potential in the sub region we attempted to study viz. the state of Kerala, marked by a relatively favourable rural infrastructure. We argue that: (a) an excessive concentration on agriculture induced linkages has resulted in an underestimation of the potential of rural linkages for rural manufacturing. The fast growing service sector in rural areas and its demand for simple intermediate goods provides considerable scope for production linkages; (b) at the same time the relative importance of agricultural linkages very often tends to be swamped out by ‘urban’ indicators of rural diversification. The former could play a dominant role in generating non-agricultural employment in relatively isolated rural areas primarily through consumption linkages; and (c) the local capital linkage or indigenous entrepreneurship has been relatively underemphasised. Stimulating local initiative can facilitate a rurally-linked process of RI. There is a real (psychic) advantage for local entrepreneurs operating in a local environment which redresses to some extent the relative place specific disadvantages of rural locations. Key words: rural industrialisation, rural non-farm employment, rural development, local linkages, rural growth linkages, entrepreneurship JEL Classification : M13, O18, R12