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The factory factor

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  • Chestnut number 1: more land for industry means India can’t feed itself. Simple answer: India’s agriculture productivity is so low that producing enough food for its population is not a question of keeping land in farmers’ hand but changing how capital is deployed.

    Chestnut number 2: urbanisation is so chaotic and ugly that people getting out of villages represent an even bigger problem than their staying in it. Simple answer: this is a problem of urban policy, not an argument against modernisation. The big cities, mostly badly governed, are the host to most migration. Tier II urban centres need to be made attractive. The pace of urbanisation in India is actually terribly slow. By 2030, just over a third of India will be urbanised, if current rates of progress don’t change.

    Chestnut number 3: how can a significant majority of the two-thirds or so Indians living in rural

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    India ever be accommodated in factory employment? Simple answer: all of rural India doesn’t work in farms. Look at data of how much rural India contributes to India’s GDP (more than half) and how much agriculture does (less than a quarter). The difference is explained by the fact that there are significant non-farm activities in rural

    India. The scale of the problem is big, but the problem is not intractable. Of a rural workforce of around 300 million, a little over 70 per cent are employed in farming. That’s around 210 million people. And obviously not all of them will work in factories; farming will continue to employ people.

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