The Government — including the banks and the other public financial institutions — would certainly provide the necessary facilities. The Committee which was set up by the Reserve Bank of India to review the special credit schemes of banks with particular reference to their employment potential has made a number of very interesting suggestions in this connection. These suggestions will be examined very quickly both by the Reserve Bank of India and the Government. But the concrete task of availing of the facilities provided by the financial institutions and utilising them for the creation of additional work and jobs is particularly a responsibility which essentially belongs to bodies like the All-India Manufacturers' Organisation and their affiliates.
Till recently, industrialists — and the units run by them — have had an inherent urban bias. This was inevitable in a milieu where access to the market was the primary factor for deciding on industrial location. The fact that transport and communications had been deficient also inhibited the spread of industry in the rural regions. There were also notions that economies of scale could more easily be reaped in larger units which, by the nature of things, were more convenient to locate in urban tracts. Recent developments would seem to belie some of these notions. As agricultural prosperity grows, the rural market is becoming increasingly important. Transport and communications too have improved considerably over the past two decades. It is not certain whether it makes much sense to transport raw materials to the urban areas, process them there, and transport back the finished goods for consumption in the villages. From the purely economic point of view the nation would gain if this cross-haul is avoided and raw materials are processed in the countryside itself. The environment cost of locating industries in exclusively urban surroundings should also be taken into account.
Over the last two decades, the regional dispersal of industries and more particularly development of agro-based and small-scale industries in the rural areas did not receive adequate attention. Unfortunately, a school of thought also advocated that small-scale industries were essentially uneconomic and resulted in waste of resources. But even pure economic logic should convince one of the irrationality of this approach. Undue emphasis on capital intensive techniques in an economy with abundant supply of labour can hardly be justified. But in addition to these purely economic arguments, the other aspects of rural industrialisation are of no less significance. As we have seen in several areas, even a unit like a sugar factory brings about a qualitative change in the countryside. In several ways it acts as a catalytic agent to break the age old barriers of caste, creed, custom and religion. All the best that is there in the process of industrialisation is taken to the countryside without the hazardous ills of urbanisation and concentrated industrialisation. This is no less important than pure economic gains for a country poised for total transformation.
