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The centralized approach to planning pursued so far in poor countries of Asia andAfrica has not succeeded in bringing about widespread change in rural life. Thetrickle down effect has failed, and with it has come a growing realization of theneed to make a direct attack on the problem of rural poverty by initiating actionat the local level through an area planning approach whereby plans for theintegrated development of small areas would be formulated and implemented bylocal people (Nyerere; and Government of India, 1978a). This planning frombelow, or grass roots planning, is expected to result in plans for betterutilization of rural resources, through local people having better awareness oftheir needs and preferences and fuller information on the conditions andpossibilities of their areas. The area level planners, having a more intimateknowledge of the interdependence of activities at the micro level, would be ina better position to develop integrated programmes which avoid duplication andproduce maximum impact with minimum cost. Moreover, a better implementationof development programmes would be ensured through more realisticplanning and greater involvement of local people in plan formulation andimplementation (Government of India, 1978b).However, it is not always realized that, in view of the economies of scalewhich may be present, an overriding concern with decentralized planning, inparticular with the objectives of local self-reliance and full utilization of localresources to the neglect of comparative advantage and regional specialization,may tend to offset the beneficial aspects of area planning mentioned above, and,therefore, need not result in an optimal situation. Whether or not it will resultin a consistency between local and national plans in an interdependent,multiregional economy is another and a far more important question; for thefailure of aggregate supply to match with aggregate demand, or of the structureof production to be in harmony with the composition of national demand is boundto have an unfavourable effect on the pace of development, especially in apublic sector dominated economy like India's where supply and demandimbalances tend to provide grounds for slow working of enterprises resulting indelayed execution of projects. However, in the absence of much work ondecentralized planning, very little is known on this aspect (Arrow and Hurwicz,Goreux and Manne; Malinvaud; Uzawa; and Westphal). Hence, it is proposed toexamine this question in some detail, spell out its implications for ruraldevelopment, and deal with the manner in which the problem posed here can beresolved. The discussion will be conducted primarily in the light of theinstitutional characteristics of the Indian economy and against the background ofits considerable experience of development. However, the treatment of thesubject matter will be made as general as possible.

Subject(s): Community/Rural/Urban Development

Issue Date: 1981

Publication Type: Conference Paper/ Presentation

PURL Identifier: Page range: 84-88

Total Pages: 5

Record appears in: International Association of Agricultural Economists (IAAE) > 1981 Occasional Paper Series No. 2

Autor: Prasad, Kamta


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