Industry as the Engine of Growth
The concept of growth with productive employment generation has important implications in terms of industrialisation and the technology adopted in the industrial sector. The large spread of the industrial sector and adoption of labour-intensive technology can create demand, which may absorb a large fraction of labour available to the non-agricultural sector. Even when the high-productivity organised industry cannot absorb labour directly, ancillarisation, sub-contracting and outsourcing can also create employment outside the organised industry due to the complementary relationship between the organised and unorganised (or formal and informal) sectors (Papola 1981). Though the relative size of the informal sector is almost equally high in both the situations of sluggish industrialisation and rapid industrialisation, the latter situation envisages the growth of productive activities even within the informal sector.