To begin with we must examine what is the meaning of market town and compare it with similar other concepts. ' The concept of `market town' may be compared with the other concepts used in regional/ area planning, namely, `growth centre' and `growth poles'. Although in final stage the all three might look same but the starting point of `market town' is different from that of the other two. In case of growth pole location of an industry is the beginning of a town in the backward region and which then generates the growth impulses. Where as in case of `market town' the town emerges as as a focal point of a agricultural region, through efficiently organising the marketing of surplus in the region and in the process contributing to the augmentation of the surplus of the region and diversifying the activity. Thus a `market town' starts as a (central) market place and then gets transformed itself as it helps to transform the hinterland. The concept of growth centre is a generic one including the cases of both `growth pole' and `market town'.

The `market towns' help the development process in the following ways: first, by enhancing the agricultural production, presumably by facilitating market access, developing free market where rent-seeking activities and other form of distortions are eliminated, and rural producers getting the right price. It may be noted here that the process is conditioned by the resource base and infrastructure in the hinterland as well as infrastructure in the town. Moreover, not just physical infrastructure, but also social and institutional set up is important. Secondly, beyond a certain point the rural development process is possible only through rural-diversification and rural industrialisation. Availability of marketing facility at an accessible distance allows a large section of households to diversify - i.e. agriculture-industry linkage is established at the household level. It has its benefits on agricultural practices and upgrading know-how for the village people. Thirdly, in the process, the presence of market town would intensify the local level input-output linkages and generate local advantages. Fourthly the town, when well connected in the urban hierarchy, would facilitate the social and institutional changes, development of productive resources - particularly the human resources - and therefore, make introduction of new production processes easier. Only in such a situation one could expect the technology based development process, which is supposed to be the dominating scenario in the era of globalisation, to be a broad based one. In fact the successful countries in Asia, have at the initial stage of their development established the rural-urban linkages and developed the small towns. Fifthly, as non-agricultural production process can be sustainable in the rural and small urban settlements, the growth of large cities in terms of number and size will be restricted. This would save some of the investment in high cost infrastructure in large cities. It really matters in the initial stage of development. However, it must be noted that the town settlement is a facilitator. Without a town, which is represents a configuration of physical infrastructure social and economic institutions, the things will difficult to take shape. But it is not the town only. The macro-level policies influencing the structure and scale of industry, the location decisions and institutional changes like land reform, influencing the structure of markets and trade relations are important. The distribution and appropriation of surplus, the transaction costs involved in trading and the growth of institutions like cooperatives depends on land reform. For instance in China the policy of regional/local self-sufficiency contributed to the rural industrialisation and formation of rural-urban linkages. Just setting up of small town does not ensure that it will function as a `market town' unless the macro- level policy and institutional support is there.

At this stage, it will be useful to state explicitly some of the assumptions implicit to the concept of a `market town'. Unless these assumptions are fulfilled, a market town cannot emerge and function in reality. Firstly, a market town is not a self-closed entity, it is a part of the hinterland. Further, this gateway of the hinterland is a node in the urban net-work system and therefore the efficiency of its functioning depends on the structure of the urban hierarchy also.

Secondly the hinterland including the town is surplus generating and accumulating through exchange/trade.

Thirdly, the local multiplier process to be operative there must be investment opportunities both in the rural and urban area.

Fourthly, the investment opportunities depends on government policy and investment in infrastructure, e.g., electrification of villages, village to town road construction, warehousing facilities and also in education and health to improve human capital.

Fifthly, the institutional reforms are required, for example land reform, which will ensure proper social structure necessary for the development of trade and market.

Sixthly, the combination of infrastructure and various institutional facilities will generate externalities over space and time. These externalities, both economic, social and organisational, benefit not only the town but also the hinterland. Thus the market town, to look into what is there inside it, may be seen as a spatial unit with a combination of public goods and social institutions, having the characteristic of merit wants.

Seventhly, a market town cannot be planted, rather its evolution is system determined, but it is not also self-emerging. Because, as mentioned earlier, it requires infrstructural provisions, appropriate composition of industry and services, and institution and practices, including social and cultural ones. Therefore there is scope for planned intervention, particularly because of its merit-want type of nature. Besides, intervention required in various dimension - influencing location decision, culture and social system. Hence there is the need for a coordinated approach. Inadequqte understanding of the concept and functioning of market town leads either to suggestion for doing away with the concept of market towns (growth centres) or wrong policy emphasis.

Policy issues

That the `market towns' are important for the development of India is recognised in early 1960s. And broadly two options are there: (a) existing small towns or mandies in suitable locations be adapted and their functions improved through better road network -including village to town roads,and provision of facilities; (b) new towns to be planned in areas with no towns and integrated with the villages. Why then in India there is not sufficient market towns excepting in a few states? Even when there are small towns they are far behind the ideal of `market town'.

One might argue that because of the lack of agricultural surplus that the market towns are not coming up. Even when there are agricultural growth in absolute terms, in view of population growth the agriculture is not sufficiently surplus generating. But the `market town' is supposed to facilitate the surplus generation, commercialisation and diversification of farm- practices. Instead we should search for reasons elsewhere. It is convenient to discuss the factors under the three broad groups, macro-level and micro-level policies and socio-institutional aspects.

Macro-level: The macro policies like emphasis on large scale industry, freight equalisation, are not conducive to the growth of market towns and integrated area development. On the other hand regional self-sufficiency has never been attempted. The concomitant to the economic policy is the infrastructural development - emphasis on highways and rail roads, but neglect of village feeder roads. In the emerging urban hierarchy, the small towns are not well connected with the immediate higher order city. The absence of regional sub-centres weakened the functioning of the small ones.

Micro level: Complementarity of various measures are not recognised leading to their ineffectiveness. Community development schemes are carried out but with out emphasis on the spatial agglomeration. The focus of the scheme is household group. Similarly the various integrated programmes, for example the IRDP, IDSMT, have not been designed to integrate rural and urban settlemens. The household based scheme like SFDA has rarely been coordinated with an integrated infrastructure development programme. The CADP is an area based scheme but it has taken road linkages and rural-urban integration taken for granted.

Social and institutional dimension: The macro and micro level policy failures can often be linked to the social and institutional constraints. The absence of land reforms, the nature of property right, absence of local level political institutions are also responsible for inefficient organisation of space in the backward regions.