Satish Kumar Sarma
(The writer is a former Head of the Department of Economics, Biswanath College)
The most striking feature of today’s economy has been the slowing down of the pace of industrialization in our country, and with it, growing unemployment. The short- and long-term effects of this economic setback must be viewed with deep concern. Though we have several achievements to our credit, we also have to admit to many serious shortcomings.
There is a progressively larger technological gap when compared with America and European countries. The young are frustrated by an absence of opportunities. And employment, however meagre, is available only in areas of industrial development to engineering graduates, cost and chartered accountants, and scientists.
Whereas these highly qualified young men are pouring out of universities and technical institutions, they are unable to obtain gainful employment near their homes and have to do their job-hunting in the industrialized areas of Mumbai, Kolkata, Bengaluru and Chennai. Clearly, if industrialization is to have meaning for the present and future generations, this pattern must change.
The Nehru era saw the growth of large-scale industries, and our progress on the economic front during the first three Five-Year Plans was impressive. In recent years, the emphasis has been on developing the small-scale industry. Is this emphasis at the cost of the expansion of the large-scale industry expedient? In the light of the present trends in industrial growth, the small-scale industrial sector can only be ancillary to the large-scale industries by meeting their requirements for components and parts.
The swing towards building up the small-scale sector and the planners’ hope of achieving their goals of economic growth in this sector implies the need for the development of the large-scale sector along similar lines since the two have to be interdependent. The small-scale sector can only develop in proportion to the expansion of the large-scale sector.
This poses several problems, but we need confine ourselves to the important aspects of quality, communication and management skills. These collectively call for the small-scale industries to be located close to the large-scale areas, on which they shall depend not only for know-how relating to the quality requirements of their products, but also for management guidance. Such a relationship will necessarily inhibit the development of the small-scale sector, apart from creating several other difficulties such as acceleration of urbanization, growth of slums and social tension. This could be avoided if our planning attached importance to the development of telecommunications and computerization of information.
In fact, for rapid industrial development based on the small-scale sector with the advantage of large-scale employment to engineers, technicians and scientists, telecommunications and ready information are vital. Our country lacks such an infrastructure. No industry, large or small, can be economically viable without it.
The size of an industrial unit depends largely on the type of technology adopted and the scope it gives for the application of managerial skills. Industry in India and even in Europe, America and Japan has, in its growth and methods of production, been essentially a continuation of the late 19th and early 20th century. No new methods of production affecting the GNP of industrialized countries have yet been adopted. It is significant that the large industries existing before World War I continue to be the industrial giants of today.
Undoubtedly, several new types of industry have come up during the last few decades, and it is this expansion in size that is influencing the growth of the GNP. The contribution of the GNP by other smaller industrial units has been negligible.
The government has encouraged the small-scale sector in order to reduce unemployment of technical manpower. There is, however, no visible planning for meeting the problems of industrial growth brought by the development of small-scale industry. The efficiency of management and the flow of ideas from the managerial level downwards depend on communication within the factory for management knowledge to reach all levels.
An independent small-scale industry could contribute to the growth of the economy through its products only if there was quick and efficient communication with knowledge and data. Only an organized management could provide this. The requirement of management skills would be far larger for us if the industry were to grow through the development of small-scale industry.
For telecommunications, the increase in the number of channels by employing multi-channel systems would make the cost of internal communication cheaper and more readily available. Now satellite communication has commenced and, as it grows, communication will become even more inexpensive.
It is estimated that knowledge has been doubling itself every decade. This emphasizes the effort taken in accumulating the vast technological data available today. And since the cost of communication will be negligible, information can be exchanged by countries at an almost no-cost basis.
Industrialists will be able to get essential marketing information. The demands for cheaper and quality consumer goods would also increase as a result of efficient international communication. Cheaper internal communication would help small-scale industries to make use of technological, marketing and other managerial and commercial services. The large-scale complexes of today would automatically disappear to “non-industrial” areas and the scope for employment would increase.
Vast improvement can be visualized in data processing and information services. Computer technology is advancing very rapidly. We hitherto severely restricted the use of computers. The computer can store information and solve problems 10,000 times faster than the human brain. Its availability at low cost is bound to make the ordinary person almost as able a manager as the best at present. With large, centralized computer centres and data banks, small-scale industries can use the best available industrial advice.
Sociological changes must follow satellite communication. One of the major effects is the dispersal of industry and the slowing down of urbanization. In fact, with improved standards of living it is likely that the population will stop concentrating in the large cities. The worker is bound to be more demanding as he would be increasingly familiar with the advancing standards of living in Europe, America and Japan.
The philosophy of contentment, which is our heritage, will have to be restated in new terms. The cultural values of the past with their emphasis on beauty and refinement as evidenced in our sculpture, music and in the arts will have to be reoriented if we are to avoid social discontent.
In our planning and allocation of resources, there is no evidence that the technological changes ushered in by the progress of telecommunications have been taken into account. The growth of telecommunications is woefully inadequate because of poor allocation of funds. Computer services are still considered in bad form in the light of large-scale unemployment.
A change in thinking, therefore, is called for so that we may utilize modern telecommunications for rapid industrialization in our country.