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Land Rezoning and Structural Transformation in Rural India: Evidence from the Industrial Areas Program

Author

Listed:
  • David Blakeslee
  • Ritam Chaurey
  • Ram Fishman
  • Samreen Malik

Abstract

Zoning laws that restrict rural land to agricultural production pose an important institutional barrier to industrial development. We study the effects of the Industrial Areas (IA) program in Karnataka, India, which rezoned agricultural land for industrial use, but without the economic incentives common with other place-based policies. We find that the program caused a large increase in firm creation and employment in villages overlapping the IAs. Moreover, the surrounding areas experienced spillover effects, with workers shifting from agricultural to non-agricultural employment, and entrepreneurs establishing numerous small-scale service sector and agricultural firms.

Suggested Citation

  • David Blakeslee & Ritam Chaurey & Ram Fishman & Samreen Malik, 2022. "Land Rezoning and Structural Transformation in Rural India: Evidence from the Industrial Areas Program," The World Bank Economic Review, World Bank, vol. 36(2), pages 488-513.
    • Handle: RePEc:oup:wbecrv:v:36:y:2022:i:2:p:488-513.
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    File URL: http://hdl.handle.net/10.1093/wber/lhab004
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