82 SOCIAL SCIENTIST agricultural sector the same will only go to conspicuous consumption as there is nothing else to do with the money. The chances of making investment in some non-agricultural activities in the rural areas are bleak because in all the manufacturing activities there are large industrial units which enjoy economies of scale and he cannot hope to stand their competition. With the development of transport and communication the goods now can reach remote villages which are now no longer isolated. Even in processing industries various large industrial units have come up closing the door for smaller units. Under the circumstances it has been observed that large surplus owners tend to invest in urban land and building where the returns are much larger due to rapid urbanisation and consequent rising land values. Personal residential houses are also built in urban areas for use of their-children and their schooling. The rest is used in jewellery or in saving schemes or put as bank deposit. The point to be emphasised is that, by and large, rural savings are not being used in rural capital formation and are being drained out of the village through the banking net work.9 In a communitarian organisation it would have been possible to plan for rural investment utilising the given resources. In that case the surplus of the village community could have been planned to be utilised in the most optimum manner. Supposing there was need for more irrigation. IN that case the first charge on community savings would have been to augment the irrigation resources. But in an individual farming system such savings cannot be made available for community asset formation. One of the reasons why capital formation in the irrigation sector is low despite the fact that less than one-third of the agricultural land in the country is irrigated is probably due to this structural constraint. This is equally true for activities like soil and water conservation, land shapings, afforestation, utilisation of bio mass for rural energy etc.10 Such activities cannot be planned and executed on an individual basis as they require a wider plan frame and large investment beyond the resources of individuals. The one alternative to take care of the needs of expanded reproduction and finance the investments is to drastically mop up the resources from the affluent classes; but the state reflects the power balance in a given situation. In an inegalitarian structure the state will be controlled by those who wield economic power and as such it will^iot hurt the richer classes. The result will be that precious resources will be allowed to be squandered in wasteful consumption while crying investment needs will go by default. This will only lead to a highly retrad6d growth, affluence for the few and immiserisation for the many. NOTES AND REFERENCES 1. Reserve Bank of India Bulletin, Vol.XI. No.6, June, 1986. 2. The money wage in most of the regions is Rs. 10 to Rs. 15. C. Gopalan, a former Director General of Indian Council of Medical Research has calculated that in 1979 a least-cost balanced diet for a family would cost Rs.10 to 11. According to his