Chestnut number 4: farmers are deeply attached to their land. Factory employment doesn’t make up for loss of this ownership. Simple answer: there’s precious little land for most farmers to get attached to. The average landholding size is 1.3 hectares, less than it is in Pakistan. Less than 5 per cent of households in villages own 10 acre-plus landholdings. Almost a third of farmers cultivate landholdings less than 2 acres. The “attachment” comes from desperation, not some deeply mystical reason. Rural non-farm income has grown much faster than rural farm income. Farmers know this, even if it is missed by city types who argue they should be delighted with tiny cultivable plots.

Chestnut number 5: the urban-rural income gap is so huge in

India that direct income transfer schemes and various state support programmes are a priority, not a big drive towards industrialisation. Simple answer: actually, the urban-rural income gap in India is narrower than in China, our usual point of reference. Of course, the farm/ non-farm transition is a long process — some economists say the full potential will take two decades to be realised — and in some cases state help will be necessary. But there’s no contradiction between aiming for higher factory employment and temporary income support schemes.

Chestnut number 6: big increase in factory employment requires labour reforms that allow hiring flexibility, and that’s politically not possible now, therefore all talk of farm/ non-farm transition will just remain talk. Simple answer: there are things a government can do to speed up the transition even before considering labour reform. Good roads are a huge boost. If the highway building programme and the rural road building programme (Pradhan Mantri Gram Sadak Yojana, PMGSY) were as successful as they should have been, rural-urban connectivity (feeder roads linking to highways) would have dramatically changed and so would have the matrix of income opportunities for rural India. As for labour reforms, if physical infrastructure encourages substantial non-farm employment but old labour laws persist, more of the same depressing story will happen. The market solution would be unorganised factory employment, which is of course anti-worker.

... contd.