Question

express your opinion on the following. There is a think line of rural-urban economic divide in India.​

Answer 1

Answer:

sorry don't know...........

Answer 2

Explanation:

A topic of long running interest to social scientists has been the processes that surround the transfor-

mation of economies along the development path. As is well documented, the process of development

tends to generate large scale structural transformations of economies as they shift from being pri-

marily agrarian towards more industrial and service oriented activities. A related aspect of this

transformation is how the workforce in such developing economies adjust to the changing macro-

economic structure in terms of their labor market choices such as investments in skills, choices of

occupations, location and industry of employment. Indeed, some of the more widely cited contri-

butions to development economics have tended to focus precisely on these aspects. The well known

Harris-Todaro model of Harris and Todaro (1970) was focussed on the process through which rural

labor would migrate to urban areas in response to wage di§erentials while the equally venerated

Lewis model formalized in Lewis (1954) addressed the issue of shifting incentives for employment

between rural agriculture and urban industry.

A parallel literature has addressed the issue of the redistributionary e§ects associated with these

structural transformations, both in terms of theory and data. A key focus of this work is trying

to uncover the relationship between development and inequality.1 This work is related to the issue

of rural-urban dynamics during development since the process of structural transformation implies

contracting and expanding sectors which, in turn, implies that the workforce has to be reallocated

and possibly re-trained. The capacity of institutions in these developing economies to cope with

these demands is thus a fundamental factor that determines how smooth or disruptive this process

will be. Clearly, the greater the disruption, the more the likelihood of income redistributions through

unemployment and wage losses due to incompatible skills.

India over the past three decades has been on exactly such a path of structural transformation.

Prodded by a sequence of reforms starting in the mid 1980s, the country is now averaging annual

growth rates routinely is excess of 8 percent. This is in sharp contrast to the Örst 40 years since

1947 (when India became an independent country) during which period the average annual output

growth hovered around the 3 percent mark, a rate that barely kept pace with population growth

during this period. This phase has also been marked by a signiÖcant transformation in the output

composition of the country with the agricultural sector gradually contracting both in terms of its

1Perhaps the best known example of this line of work is the "Kuznets curve" idea that inequality follows an inverse-

U shape with development or income (see Kuznets (1955)). More recent work on this topic explores the relationship

between inequality and growth (see, for example, Persson and Tabellini (1994) and Alesina and Rodrik (1994) for

illustrative evidence regarding this relationship in the cross-country data).