Question

Long answer type questions.

Explain role of rural industries in economic development.

Answer 1

Rural industries have contributed to economic development in the following way:
i. They generate employment opportunities: Cottage and rural industries play a significant role in providing employment opportunities, particularly to the people in rural areas. This proves to be a boon, especially for the economically weaker sections of the rural society.

ii. They mitigate disguised unemployment and alleviate poverty: Small-scale businesses use labour-intensive production techniques; and thus provide employment to excess/surplus rural labourers. Small-scale businesses remove disguised unemployment from the agriculture sector and, at the same time, provide livelihood to the rural people. Hence, they contribute to alleviating rural poverty.

iii. They enable equitable income distribution: The capital requirement for small-scale businesses is low, mainly because of the use of labour-intensive production techniques. This encourages entrepreneurs to start units on a small scale. Small-scale businesses are, therefore, set up all over the country to provide employment opportunities to the rural people. This triggers the redistribution of wealth and income and enables the equitable distribution of income in rural areas.

iv. They help accelerate growth: Small-scale businesses have been considered as a major factor behind the acceleration of economic growth and as an employment generator, particularly in the rural and backward areas of India.

v. They facilitate rural development and reduce migration from rural to urban areas: It is well known that a large number of people migrate from rural to urban areas in search of better employment opportunities and improved standard of living. Small-scale businesses help reduce the migration of people by providing employment opportunities to rural people. By doing so, small units also help in mitigating the excessive pressure on urban infrastructure.