Recent interest on rural industries derives from recognition of the
limits of agriculture and organised manufacturing sector in employment
generation especially during the post-liberalisation period in India.
Historically, industrial development of the West and the East present
contrasting pictures of rural industries. One, the linearity model founded
on the historical experience of the West, holds that development implies
a movement away from traditional subsistence production in rural areas
to modern industrial production in urban centres. The other, the East
Asian Experience has shown that the growth potential of rural industries
is considerable given the under-utilisation of the physical labour and the
entrepreneurial ability of rural people. A combination of putting out
system and subcontracting system - along with modern factory and
industrial cooperatives - has persisted in the rural manufacturing sector
even in the era of economic liberalisation. We find differential capital
endowments and socio-economic constraints of rural artisans reflecting
extensive division of labour, specialisation and fragmentation of the
labour process. These do not satisfy the requirements of the linearity
model founded in advanced capitalist countries.