Published: 19th Sep, 2019
The residual sector hypothesis by Vaidyanathan expounds that when agricultural surplus labour is not been able to get absorbed by urban industrial sector RNFS acts as a sponge for this surplus labour. Rural India is thereby witnessing a transition.
- Employment growth in the farm sector is not the same as employment growth in general. Rural industrialization has the capacity to absorb labour surplus in farms and also set a chain of other related peripheral employment opportunities.
- The rural urban migration that puts stress on cities is likely to get reduced if RNFS is harnessed and the income gaps between India and Bharat can be lowered to a certain degree.
- The nature of rural industry will be labour industry which can save jobs for rural population.
- Further, Nonfarm activities do not get affected by crop failure and droughts.
- It is in this context an alternative employment opportunity is the need of the hour.
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