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The expansion of garment manufacturing in Tiruppur has transformed the surrounding countryside as well as the town, both as garment ma ufacturing has spread into the countryside and through the knock-on effects of hav ing a dynamic and relatively labour intensive industrial sector nearby. It has p rovided a valuable alternative to agriculture as agriculture has been running into pr oblems. Many of the people previously employed in agriculture have moved into garment manufacturing and associated activities as the garment sector has exp anded. There have been new opportunities for entrepreneurs as well as for labo ur, not only directly in garment and other manufacturing but in trade and services, tran sport, construction, et al. as well. The paper uses data collected in 2008/9, and in 198 1/2 and 1996, in villages 20-30 km north west of Tiruppur to show how the expansion of the garment sector has changed the local rural economy, and how access to the new opportunities in the garment sector has been structured by gender, caste, and ag e, et al. What emerges from these data is that ‘Tiruppur’ has provided direct employm ent to large numbers from less well-placed households, many of whom now commute to work in Tiruppur and elsewhere. It has also pushed wages up in agricultu re and other occupations, including those that are not directly related to the expansio n of the garment sector. Considerably more than half of the working population is still e ngaged in agriculture however. Roughly half of the remainder work in the garment s ector, and half in non-agricultural occupations other than garments. The paper shows th at more women are now ‘housewives’ staying at home as their husbands are e rning more. Labour is strongly supported by welfare measures introduced by the sta t – programmes such as the PDS (public distribution system) which supplies subsidi ed food and essential commodities, mid-day meals in school, and now also the NREGS (national rural employment guarantee scheme). All of these state in terventions have had a significant effect on the local economy. Educational provision has expanded very considerably too and is now beginning to produce returns for mem b rs of the lowest social strata as well as for those that are better off. One of the w orrying factors is that women still receive very substantially lower wages than men how ever. Caste is still also a major source of differentiation. This is all still very much a ‘low road’ path of de velopment which may have been appropriate in a period in which soaking up surplus labour was a priority. It is no longer appropriate in the Tiruppur region now. The tightening of the labour market might be expected to lead to some upgrading of skil ls and productivity. It is difficult to see the shift to higher productivity happening w ithout substantial state support of a kind that does not seem to be on the cards. Tamil N adu is a state that is championing a private sector-led development path – as elsewhere in India, if not more so – right now. SussexII.doc 13/06/2011 3 The Impact of a Global Value Chain in South India o n the Rural Areas in its Vicinity

The impact of a global value chain in South India on the rural areas in its vicinity