1.5 export in developed countries. Industrlisation is supposed

1.5
Resource profile of Jammu and Kashmir

The state of Jammu and Kashmir is well
endowed with forest, and water resources. It is however, deficient in coal,
petroleum, natural gas, iron ore, manganese, thorium, uranium, aluminum, mica,
sillimanite, phosphates, dolomite, mercury, silver, etc. Some of the important
minerals found in the state are copper, lead, zinc, bauxite, chromium, gold,
arsenic, kaolinite, bios-pore, ochre, coal, lignite, slate, marble, sapphire,
rubellite, quartz and serpentine.

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Extraction of minerals is the economic
necessity. The economic structure of Jammu and Kashmir is quite complex hinges
on the industries. These industries draw their raw materials from minerals,
forests and agriculture. The large-scale and heavy industries, economic and
commercial activities are largely dependent on minerals and metals. Since we
cannot sustain our economy and society without industrial development, it is
imperative to utilize the resources judiciously and to manage the mining
industry scientifically. The above claims and arguments regarding the resources
base of Jammu and Kashmir clearly show that resources are abundantly available
in the state. Hence, Government should boost the local industries to exploit
the resources efficiently. The role of government policies regarding the
industrlisation can play most vital role to motivate the small scale industries
by framing the industrial friendly policies.

 

1.6
Review of Literature

Ehrlich, 1995 on initial view there seems to be a
positive correlation between growth and industrialization there is data of
developing countries which does not show any direct relation. The increase in
output is driven by aggregate demand in developing counties and by export in
developed countries. Industrlisation is supposed to be important engine of
growth according Kaldor 1957, Marshall, Young. The importance of manufacturing
industry lies in the dissemination of technology that is related to
manufacturing industry. Time series data in this paper of U.S shows that as
time passes productivity increases in terms of labour productivity and
production skills.

Shapiro, 2007 explains the role of industrial policy
that will be as an instrument to expedite the process of industrlisation. The
importance of policy lies in the fact that there is an assumption of market failure.
  In perspective, it can be said that, if manufacturing industries
are “escalator industries” for economic development (Rodrik 2013; Szirmai and
Verspagen, 2015; Foster-McGregor and Verspagen, 2016; Marconi et al., 2016) and
the acquisition of production capabilities in an increasing range of goods ?
i.e. the opposite of the sectoral concentration here documented ? is crucial
for a sustainable growth to be achieved (Haussmann et al., 2011).

Adam Szirmai has analyzed the role
of manufacturing as a driver of growth in developing countries in the period
(1950-2005). The working hypothesis put forward to the test is an econometric
model is that correlation between levels of GDP per capita and shares of
manufacturing results from the causal relationship between industrialization
and growth. The main theoretical and empirical arguments supporting this
hypothesis are.(1)Productivity is higher in the manufacturing sector than in
agricultural sector(2)Special opportunities for capital accumulation is possible
in manufacturing sector(3)Economies of scale is offered by manufacturing
sector(4)The strong linkage and spillover effects in manufacturing than in
agricultural and mining. As per capita income rise the share of agricultural
expenditure declines and demand for manufactured goods increases (Engels law).
The main findings of the paper is that there is a moderate positive relation
impact of manufacturing on growth in line with the engine of growth hypothesis,
in case agriculture and services no such impact was found in same period.

Szirmai, 2009 measures the engine of growth hypothesis in
developing countries. Here it is supposed to be manufacturing industry. The
statistical evidence is not always supporting the theory hence we cannot
generalize the theory to practicality. The assumption on which Kaldor’s model
is based indicates that the intricate construct of developing countries is
different from developed countries. The share of manufacturing has increased
overall in 63 developing taken for analysis in this paper. The increase has
just been of 4 %. Again, when countries are considered in groups that are not
separately the unique policy that a country is following is not taken
separately. Assumption on which Kaldor’s model is based is that increase in
share of manufacturing sector leads to increase in per capita income which in
turn leads to increase in aggregate demand (Keynesian in nature).

 

Ashoka Parthasarathi (2005) highlights the role of
khadi and village industries in order to boost the rural industrialization
programme. Author has argued how Khadi and village industries commission in
India has failed to effectively linkup with research and development as well as
with technology supplies involved in India’s rural industrialization programme.
Author has made a comparison between Indian programme and Chinas Spark
programme approved by Chinese government in 1986 for the promotion of rural economic
development by relying on science and technology. A distinctive feature of the
spark programme was the close and deep involvement of the provincial research
and development council both as generators of technology and techniques
relevant to commercially utilization of wide variety of the natural resources
of province concerned. During the period 1986-2001, the spark programme has
conducted1,20,000  demonstration projects
of which 11,300 were at national level covering more than 85 percent of cities
and towns. The concept of townships in china was another big achievement after
the spark programme fulfilling the aim to development of rural
industrialization. There were 21 million townships enterprises with 127 million
employees, generating 2720 billion Yuan (US$ 328 billion) in 2000.Author
further laid stress to learn from the Chinese experience and implement similar
kind of policies in India. The role of bio-technology was also highlighted
which will not only boost agriculture but for high productivity growth of
medicinal and aromatic plants and for producing industrial products such as
high value chemicals. Lastly, author argues that the need of large network of
promotional agencies coordinated by department of small scale industries (SSI)
and Agro and Rural industries (ARI) supervised by high level Rural
industrialization development board (RIDB). The RDIB should encourage a large
number of the NGO,s covering all the parts of the country to initiate the
extension , demonstration  and training
functions on rural technology based growth.

Adam Szirmai has analyzed the role
of manufacturing as a driver of growth in developing countries in the period
(1950-2005). The working hypothesis put forward to the test is an econometric
model is that correlation between levels of GDP per capita and shares of
manufacturing results from the causal relationship between industrialization
and growth. The main theoretical and empirical arguments supporting this
hypothesis are.

(1)Productivity is higher in the
manufacturing sector than in agricultural sector(2)Special opportunities for
capital accumulation is possible in manufacturing sector(3)Economies of scale
is offered by manufacturing sector(4)The strong linkage and spillover effects
in manufacturing than in agricultural and mining. As per capita income rise the
share of agricultural expenditure declines and demand for manufactured goods
increases (Engels law). The main findings of the paper is that there is a
moderate positive relation impact of manufacturing on growth in line with the
engine of growth hypothesis, in case agriculture and services no such impact
was found in same period.

Dellas
and Koubi (2001) argue that the industrialization of labour is the main engine
of growth during the early stages of economic development. They emphasize the
effects of investment on the composition of the labour force; and unlike recent
claims pointing to industrialization via equipment investment, they suggest
that employment industrialization policies may hold the key to success in the
developing countries.

 

Dilipkumar (1988) argues that the pressing concern
for creation of productive employment opportunities in developing countries
requires an employment-oriented industrlisation strategy which involves
simultaneously both employment objective and industrial development objective
is an interrelated way. Onwards, merits of an employment-oriented development
with labor –intensive industrlisation contributes to decline of unemployment,
poverty alleviation and income inequality alongside economic growth through
generation of more productive and adequately enumerated jobs. Employment
opportunities will be both for skilled and unskilled unemployed labor force.
Both the industries and agriculture sectors are mutually interdependent and
complementary. Hence, the development should go hand in hand in both sectors.
Agriculture will provide unskilled labor force, raw materials to industries and
will create demand for industrial production likewise industry will help to
raise the production in agriculture through the supply of agricultural inputs
and implements. The contentious decline in the agricultural sector in
Bangladesh, landlessness, inequality in land ownership ultimately leads to more
and more attention for the development of industrlisation. Huge attention was
given to industrialization process through the employment oriented
industrialization strategy may bring economic growth. Two main hypotheses were
considered here subjected to empirical tests.

1.      Whether
relatively efficient labor intensive industries can increase both labour
absorption and output at same time.

2.      Whether
market demand for labor intensive manufactured products has an implication on
employment on both employment and output.