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Structural Transformation and the Agrarian Question in the Indian Economy

In: Development Challenges of India After Twenty Five Years of Economic Reforms

Author

Listed:
  • K. P. Kannan

    (Honorary Fellow, Centre for Development Studies
    Laurie Baker Centre for Habitat Studies, COSTFORD)

Abstract

Structural transformation is profoundly linked to several political, socio-economic and technological factors. From a labourist perspective the transfer of surplus labour from agriculture to industry, for example, is a function of higher wages and productivity in industry. This paper is essentially attempting to interrogate the structural transformation in the Indian economy from the point of shifts in employment away from agriculture in terms of its content. While this transition would be of great interest and consequence to both capital and labour, there is the third actor, i.e. the state. The renewed debate has brought in the role of the state and rightly so. The state in a country like India promised national economic development through a political process of universal franchise in a multi-party electoral system. This factor is important to note to understand the role of the state in addressing the question of agrarian transition. By deploying a measure of ‘Rurality of Employment’ to include non-agricultural rural employment activities that push the agrarian transition in the wider context of rural transition, this paper finds that this structural transformation away from agriculture is not accompanied by a structural transformation away from rural employment and the rural nature of urban employment. Second, we look at the regional spread and find a four-fold pattern where only a few states qualify for a meaningful structural transformation even in the limited sense of moving away from the agricultural sector for majority employment. Third, we look at the social dimension of this structural transformation and find its partial character because it is limited to three out of five broad social groups. From our analysis of the partial nature of India’s structural transformation with weak foundations, an important lesson from a developmental point of view is the need for a concerted strategy of employment-led development of the rural economy.

Suggested Citation

  • K. P. Kannan, 2020. "Structural Transformation and the Agrarian Question in the Indian Economy," India Studies in Business and Economics, in: Nripendra Kishore Mishra (ed.), Development Challenges of India After Twenty Five Years of Economic Reforms, pages 305-329, Springer.
    • Handle: RePEc:spr:isbchp:978-981-15-8265-3_16
    DOI: 10.1007/978-981-15-8265-3_16
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