@article{Prasad:197111,
      recid = {197111},
      author = {Prasad, Kamta},
      title = {Area Planning Approach to Rural Development and the  Problem of Consistency Between Local and National Planning},
      address = {1981},
      number = {988-2016-77389},
      pages = {5},
      year = {1981},
      abstract = {The centralized approach to planning pursued so far in  poor countries of Asia and
Africa has not succeeded in  bringing about widespread change in rural life. The
trickle  down effect has failed, and with it has come a growing  realization of the
need to make a direct attack on the  problem of rural poverty by initiating action
at the local  level through an area planning approach whereby plans for  the
integrated development of small areas would be  formulated and implemented by
local people (Nyerere; and  Government of India, 1978a). This planning from
below, or  grass roots planning, is expected to result in plans for  better
utilization of rural resources, through local people  having better awareness of
their needs and preferences and  fuller information on the conditions and
possibilities of  their areas. The area level planners, having a more  intimate
knowledge of the interdependence of activities at  the micro level, would be in
a better position to develop  integrated programmes which avoid duplication and
produce  maximum impact with minimum cost. Moreover, a better  implementation
of development programmes would be ensured  through more realistic
planning and greater involvement of  local people in plan formulation and
implementation  (Government of India, 1978b).
However, it is not always  realized that, in view of the economies of scale
which may  be present, an overriding concern with decentralized  planning, in
particular with the objectives of local  self-reliance and full utilization of local
resources 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  result
in a consistency between local and national plans in  an interdependent,
multiregional economy is another and a  far more important question; for the
failure of aggregate  supply to match with aggregate demand, or of the  structure
of production to be in harmony with the  composition of national demand is bound
to have an  unfavourable effect on the pace of development, especially  in a
public sector dominated economy like India's where  supply and demand
imbalances tend to provide grounds for  slow working of enterprises resulting in
delayed execution  of projects. However, in the absence of much work  on
decentralized planning, very little is known on this  aspect (Arrow and Hurwicz,
Goreux and Manne; Malinvaud;  Uzawa; and Westphal). Hence, it is proposed to
examine this  question in some detail, spell out its implications for  rural
development, and deal with the manner in which the  problem posed here can be
resolved. The discussion will be  conducted primarily in the light of the
institutional  characteristics of the Indian economy and against the  background of
its considerable experience of development.  However, the treatment of the
subject matter will be made  as general as possible.},
      url = {http://ageconsearch.umn.edu/record/197111},
      doi = {https://doi.org/10.22004/ag.econ.197111},
}