This paper investigates the role of small rural towns in local economic development in two poor states of India. It is based on research carried out in the context of a DFID-funded project on the rural non-farm economy in Madhya Pradesh and Orissa. Emphasis is given to interactions between small towns, on the one hand, and the village and wider economies, on the other, with special reference to employment and input and output market linkages. The paper highlights relevant lessons for public policy and investment interventions that take spatial considerations into account.
The paper is based upon fieldwork conducted in two districts of Madhya Pradesh (Betul and Narsimhapur) and two districts of Orissa (Bolangir and Nayagarh). A formal questionnaire survey, comprising 183 randomly selected enterprise units, was carried out in five small towns (block headquarters) and one medium-sized town (district headquarters) to gain an understanding of the enterprise sector and patterns of interaction between small urban centres, their hinterland, and the wider economy. Thirty semi-structured interviews with key informants in the enterprise and government sectors in these six locations were also conducted in order to allow for detailed discussions of specific issues. The enterprise survey was complemented by a formal questionnaire comprising 100 households in four villages of Bolangir District. This small survey provides a complementary village-level perspective on rural- urban interaction as well as insights into critical factors enabling or constraining the ability of village households to access markets, employment, and services in local and more distant urban centres.
Wandschneider, T., Small rural towns and local economic development: Evidence from two poor states in India, presented at the International Conference on Local Development. World Bank, Washington 16 - 18 June, 2004. Session on "Bringing Rural and Urban Together for Local Development." Chatham, UK, Natural Resources Institute, 32 pp.