1.5Resource profile of Jammu and KashmirThe state of Jammu and Kashmir is wellendowed with forest, and water resources. It is however, deficient in coal,petroleum, natural gas, iron ore, manganese, thorium, uranium, aluminum, mica,sillimanite, phosphates, dolomite, mercury, silver, etc. Some of the importantminerals found in the state are copper, lead, zinc, bauxite, chromium, gold,arsenic, kaolinite, bios-pore, ochre, coal, lignite, slate, marble, sapphire,rubellite, quartz and serpentine.

 Extraction of minerals is the economicnecessity. The economic structure of Jammu and Kashmir is quite complex hingeson the industries. These industries draw their raw materials from minerals,forests and agriculture. The large-scale and heavy industries, economic andcommercial activities are largely dependent on minerals and metals. Since wecannot sustain our economy and society without industrial development, it isimperative to utilize the resources judiciously and to manage the miningindustry scientifically.

The above claims and arguments regarding the resourcesbase of Jammu and Kashmir clearly show that resources are abundantly availablein the state. Hence, Government should boost the local industries to exploitthe resources efficiently. The role of government policies regarding theindustrlisation can play most vital role to motivate the small scale industriesby framing the industrial friendly policies. 1.6Review of LiteratureEhrlich, 1995 on initial view there seems to be apositive correlation between growth and industrialization there is data ofdeveloping countries which does not show any direct relation.

The increase inoutput is driven by aggregate demand in developing counties and by export indeveloped countries. Industrlisation is supposed to be important engine ofgrowth according Kaldor 1957, Marshall, Young. The importance of manufacturingindustry lies in the dissemination of technology that is related tomanufacturing industry. Time series data in this paper of U.

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S shows that astime passes productivity increases in terms of labour productivity andproduction skills.Shapiro, 2007 explains the role of industrial policythat will be as an instrument to expedite the process of industrlisation. Theimportance of policy lies in the fact that there is an assumption of market failure.  In perspective, it can be said that, if manufacturing industriesare “escalator industries” for economic development (Rodrik 2013; Szirmai andVerspagen, 2015; Foster-McGregor and Verspagen, 2016; Marconi et al., 2016) andthe acquisition of production capabilities in an increasing range of goods ?i.e. the opposite of the sectoral concentration here documented ? is crucialfor a sustainable growth to be achieved (Haussmann et al.

, 2011).Adam Szirmai has analyzed the roleof manufacturing as a driver of growth in developing countries in the period(1950-2005). The working hypothesis put forward to the test is an econometricmodel is that correlation between levels of GDP per capita and shares ofmanufacturing results from the causal relationship between industrializationand growth. The main theoretical and empirical arguments supporting thishypothesis are.(1)Productivity is higher in the manufacturing sector than inagricultural sector(2)Special opportunities for capital accumulation is possiblein manufacturing sector(3)Economies of scale is offered by manufacturingsector(4)The strong linkage and spillover effects in manufacturing than inagricultural and mining. As per capita income rise the share of agriculturalexpenditure declines and demand for manufactured goods increases (Engels law).The main findings of the paper is that there is a moderate positive relationimpact of manufacturing on growth in line with the engine of growth hypothesis,in case agriculture and services no such impact was found in same period.

Szirmai, 2009 measures the engine of growth hypothesis indeveloping countries. Here it is supposed to be manufacturing industry. Thestatistical evidence is not always supporting the theory hence we cannotgeneralize the theory to practicality. The assumption on which Kaldor’s modelis based indicates that the intricate construct of developing countries isdifferent from developed countries. The share of manufacturing has increasedoverall in 63 developing taken for analysis in this paper.

The increase hasjust been of 4 %. Again, when countries are considered in groups that are notseparately the unique policy that a country is following is not takenseparately. Assumption on which Kaldor’s model is based is that increase inshare of manufacturing sector leads to increase in per capita income which inturn leads to increase in aggregate demand (Keynesian in nature).  Ashoka Parthasarathi (2005) highlights the role ofkhadi and village industries in order to boost the rural industrializationprogramme. Author has argued how Khadi and village industries commission inIndia has failed to effectively linkup with research and development as well aswith technology supplies involved in India’s rural industrialization programme.Author has made a comparison between Indian programme and Chinas Sparkprogramme approved by Chinese government in 1986 for the promotion of rural economicdevelopment by relying on science and technology. A distinctive feature of thespark programme was the close and deep involvement of the provincial researchand development council both as generators of technology and techniquesrelevant to commercially utilization of wide variety of the natural resourcesof province concerned. During the period 1986-2001, the spark programme hasconducted1,20,000  demonstration projectsof which 11,300 were at national level covering more than 85 percent of citiesand towns.

The concept of townships in china was another big achievement afterthe spark programme fulfilling the aim to development of ruralindustrialization. There were 21 million townships enterprises with 127 millionemployees, generating 2720 billion Yuan (US$ 328 billion) in 2000.Authorfurther laid stress to learn from the Chinese experience and implement similarkind of policies in India. The role of bio-technology was also highlightedwhich will not only boost agriculture but for high productivity growth ofmedicinal and aromatic plants and for producing industrial products such ashigh value chemicals. Lastly, author argues that the need of large network ofpromotional agencies coordinated by department of small scale industries (SSI)and Agro and Rural industries (ARI) supervised by high level Ruralindustrialization development board (RIDB). The RDIB should encourage a largenumber of the NGO,s covering all the parts of the country to initiate theextension , demonstration  and trainingfunctions on rural technology based growth.

Adam Szirmai has analyzed the roleof manufacturing as a driver of growth in developing countries in the period(1950-2005). The working hypothesis put forward to the test is an econometricmodel is that correlation between levels of GDP per capita and shares ofmanufacturing results from the causal relationship between industrializationand growth. The main theoretical and empirical arguments supporting thishypothesis are.(1)Productivity is higher in themanufacturing sector than in agricultural sector(2)Special opportunities forcapital accumulation is possible in manufacturing sector(3)Economies of scaleis offered by manufacturing sector(4)The strong linkage and spillover effectsin manufacturing than in agricultural and mining.

As per capita income rise theshare of agricultural expenditure declines and demand for manufactured goodsincreases (Engels law). The main findings of the paper is that there is amoderate positive relation impact of manufacturing on growth in line with theengine of growth hypothesis, in case agriculture and services no such impactwas found in same period.Dellasand Koubi (2001) argue that the industrialization of labour is the main engineof growth during the early stages of economic development.

They emphasize theeffects of investment on the composition of the labour force; and unlike recentclaims pointing to industrialization via equipment investment, they suggestthat employment industrialization policies may hold the key to success in thedeveloping countries. Dilipkumar (1988) argues that the pressing concernfor creation of productive employment opportunities in developing countriesrequires an employment-oriented industrlisation strategy which involvessimultaneously both employment objective and industrial development objectiveis an interrelated way. Onwards, merits of an employment-oriented developmentwith labor –intensive industrlisation contributes to decline of unemployment,poverty alleviation and income inequality alongside economic growth throughgeneration of more productive and adequately enumerated jobs. Employmentopportunities will be both for skilled and unskilled unemployed labor force.Both the industries and agriculture sectors are mutually interdependent andcomplementary. Hence, the development should go hand in hand in both sectors.

Agriculture will provide unskilled labor force, raw materials to industries andwill create demand for industrial production likewise industry will help toraise the production in agriculture through the supply of agricultural inputsand implements. The contentious decline in the agricultural sector inBangladesh, landlessness, inequality in land ownership ultimately leads to moreand more attention for the development of industrlisation. Huge attention wasgiven to industrialization process through the employment orientedindustrialization strategy may bring economic growth. Two main hypotheses wereconsidered here subjected to empirical tests.1.

      Whetherrelatively efficient labor intensive industries can increase both labourabsorption and output at same time.2.      Whethermarket demand for labor intensive manufactured products has an implication onemployment on both employment and output.