Transfer of Technology in Informal Sector: A Case of Power Ghanis in a Tamil Nadu Village

Moulik T K and Purshotham P

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: In the initial phases, improved technologies have always been difficult to popularise among the target adoptors. To overcome this constraint, the authorities charges with the task of popularising them have opted to offer different kinds of incentives to the prospective adoptors. Such incentives are often in the form of grants, institutional loans at highly subsidized rates of interest, tax exemptions and subsidized tariffs. In the case of institutional subsidized loans, the criterion employed to identify the beneficiaries is the creditworthiness of the prospective beneficiary – in other words his resource position. Such a policy bypasses ruthlessly, the resource poor individuals though they may be willing to take the risk and motivated. Most often the technologies are more productive than traditional ones. Thus, their adoptors enjoy considerable advantage of returns over non-adoptors. If such technologies are passed on to a select and resourceful section among people having a common profession, they are likely to generate income inequalities and wealth disparities in due course. Also, their return advantage character could displace the non-adoptors from their profession. More often, such displaced individuals have to either give up the profession and find employment avenues elsewhere such as in agriculture labouring or seek daily wage jobs with the successful adoptors of improved technology who establish stability, expand their operations and acquire a sizeable proportion of market share of the activity. In other words, a definite structural retrogression takes place in the economic position of the people in the profession. The pivotal factor leading to the above course is the policy regarding the incentives and the criterion chosen to grant and their administering. It is therefore imperative on the part of the technology transfer policy formulation agency to have a critical thinking on all these factors before it finalises the policies and draws up programmes for their execution. The following case which deals with popularisation of improved (power) ghanis in a Tamil Nadu village is an empirical illustration of the above phenomenon.

Date: 1982-11-01
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