According to Upadhyay, on the basis of economy we should have a village and a district. Economic planning to destroy the villages, ultimately, would prove to be a disaster to India. It would be difficult to return to the system once the system was caught in the vicious circle of heavy industry and centralization. According to him, the capital goods should be prepared by large industries and consumer goods be made by small industries. Upadhyay does not agree that small industries are not financially viable. The truth is that strength of economy is not due to large-scale production, but due to higher productivity.
If we look at history, even when there was a large textile fabric industry in Britain, India’s textile products would have been cheaper when sold there. The things from Japan that come in cheap markets and removes the rest, are not made in large factories. If the disadvantage of small industries is removed, then the small industries will be much more successful, provided, the extra facilities are not given to big industries. Considering the concept of big industries being economical as delusional, there are the following ideas of Upadhyay.
The economical nature of big industries is not due to fair competition, rather it is derived from compelling robbery. Large industries often exploit the labourers.
Once their market domination is established, the motivation of their industrial efficiency is destroyed. These industries are so large that they cannot be operated economically. In a decentralized economy, small and cottage industries will become the backbone of the economy, but according to him, the big industries cannot be totally ignored. Therefore, he accepts the inevitability of the big industry. But there should not be centralization of economic power in it. He did not agree that small industries are uneconomical. He thinks that the economical nature of large industries is an illusion, real economic progress comes only through small industries.
