Cluster Development Initiative for Poverty Alleviation : A Case Study

Abstract

From a relatively minor sector of a largely part-time and subsistence in nature, the rural non-farm economy is a very important contributor to the economic growth of a region because of its frequently small scale, low capital requirements and seasonality, etc. Industrial clusters are widely understood as a worthwhile target for local economic development and poverty alleviation. Review of existing evidence underlines the relationship between cluster and poverty. In India, clusters of micro and small enterprises are in existence for centuries. But only in late 80’s the policy and schemes for development of those clusters gathered pace. In the State of Assam, thousands of rural household enterprises are operating based on traditional skill and local resources, acting as a sustainable livelihood for the rural household. Labour is expected to be more productive within cluster which translates into higher income. Our analysis reveals that cluster initiative empowered rural artisanal segments, helped in increase in income with household status, creation of assets, social capital, skill upgradation, product development and improved backward and forward linkages, etc.