SlideShare a Scribd company logo
GROWTH OPPORTUNITIES AND
    HURDLES IN INDIA



               How has India’s
                  economic
                growth been
               portrayed in the
                   media?
The Indian situation

•Second largest population in the world i.e 1.22 bn

• Very successful service sector 9.4%, but a poorly
   performing industrial sector 7%

• Geographic economic disparity

• Democratic government & traditions

• Strong financial institutions
The traditional growth pattern

• The traditional economic growth recipe relied
heavily upon industrial sector expansion

• Industrial growth can lift a large proportion of a
country’s population out of poverty

• Industry brings in capital and encourages
infrastructural development

•Export-driven growth is useful for developing
Countries
Why services grew but not
                            industry?
• In 1981, India’s industrial sector was on par with
those of other countries.

• At that time, its service sector actually lagged (in
terms of the value-added as a percent of GDP and
in terms of employment share)

• However, at that time India did not favor labor
intensive industry in 1981; it instead favored skill
intensive industry

           Value-added by labor intensive industry
         Value-added by non-labor intensive industry
What Can India Do?

• The lagging states need to follow a more
traditional pattern of growth: labor-intensive
Manufacturing

• Easier to employ the masses

•Easier to export manufactured goods

• What has prevented India from doing such a
thing in the first place? Harmful regulation is
the primary culprit.
India’s pathway to growth

• Dual-track growth: industrial growth in the inland states alongside
continued service-sector expansion

•Pruning regulations and labor laws relating to manufacturing
    - Allow people to be fired
    - Encourage industrial firms to achieve economies of scale

•domestic industry to become competitive in the international marketplace

• Investing in education, especially in primary and secondary
education for the general public

• Investing in public infrastructure

• Focus on aiding industry
Takeaways

• Indian growth stems primarily from its service sector

• Capital has had relatively small role in Indian growth

• The British left strong institutions, but their legacy
inspired harmful regulations and policies

• The key to improving the Indian growth rate, and to
minimizing economic disparity, is industrial reform

• Corruption levels are actually better than those of
comparator countries

More Related Content

What's hot

The Service Economy
The Service EconomyThe Service Economy
Economics ppt
Economics pptEconomics ppt
Economics ppt
Ranjeet Kumar
 
Public sector Unit
Public sector UnitPublic sector Unit
Public sector Unit
Rajat Baranwal
 
Bba 4
Bba 4Bba 4
Small scale industries
Small scale industriesSmall scale industries
Small scale industries
Samandeep Singh
 
Infrastructure bottleneck in india
Infrastructure bottleneck in indiaInfrastructure bottleneck in india
Infrastructure bottleneck in indiaSambit Biswal
 
Infrastructural need for india
Infrastructural need for indiaInfrastructural need for india
Infrastructural need for india
Aqib Khan
 
Importance of Private Sector in India
Importance of Private Sector in IndiaImportance of Private Sector in India
Importance of Private Sector in IndiaHasan Ali Kanba
 
Different problems faced by the private sector
Different problems faced by the private sectorDifferent problems faced by the private sector
Different problems faced by the private sector
Dipanway Bhabuk
 
A Presentation on Public Sector Undertakings in India
A Presentation on Public Sector Undertakings in IndiaA Presentation on Public Sector Undertakings in India
A Presentation on Public Sector Undertakings in India
Parth Mehta
 
Industrialization in Bangladesh
Industrialization in BangladeshIndustrialization in Bangladesh
Industrialization in Bangladesh
Uday Kumar Shil
 
Mayur group
Mayur groupMayur group
Mayur group
mayurgroupin
 
The Review of Industrial Policies in Bangladesh from 1971 - 2014
The Review of Industrial Policies  in Bangladesh from 1971 - 2014The Review of Industrial Policies  in Bangladesh from 1971 - 2014
The Review of Industrial Policies in Bangladesh from 1971 - 2014
Hasanul Banna
 
Financing for development
Financing for developmentFinancing for development
Financing for development
Rajesh Arigela
 
Economics - Over dependence On Service Sector Ppt - Done By Eco Grp
Economics - Over dependence On Service Sector Ppt - Done By Eco GrpEconomics - Over dependence On Service Sector Ppt - Done By Eco Grp
Economics - Over dependence On Service Sector Ppt - Done By Eco Grp
Kunj _R
 
Industrial sector of Bangladesh
 Industrial sector of Bangladesh Industrial sector of Bangladesh
Industrial sector of Bangladesh
Saifuddin Nezami
 
Role of public and private
Role of public and privateRole of public and private
Role of public and private
zafrid hussain
 
Indian Economy between 1950 to 1990, Class XII
Indian Economy between 1950 to 1990, Class XIIIndian Economy between 1950 to 1990, Class XII
Indian Economy between 1950 to 1990, Class XII
AnjaliKaur3
 
A Report on Public Sector Undertakings in India
A Report on Public Sector Undertakings in IndiaA Report on Public Sector Undertakings in India
A Report on Public Sector Undertakings in India
Parth Mehta
 
Economy of china
Economy of chinaEconomy of china
Economy of china1vimal1
 

What's hot (20)

The Service Economy
The Service EconomyThe Service Economy
The Service Economy
 
Economics ppt
Economics pptEconomics ppt
Economics ppt
 
Public sector Unit
Public sector UnitPublic sector Unit
Public sector Unit
 
Bba 4
Bba 4Bba 4
Bba 4
 
Small scale industries
Small scale industriesSmall scale industries
Small scale industries
 
Infrastructure bottleneck in india
Infrastructure bottleneck in indiaInfrastructure bottleneck in india
Infrastructure bottleneck in india
 
Infrastructural need for india
Infrastructural need for indiaInfrastructural need for india
Infrastructural need for india
 
Importance of Private Sector in India
Importance of Private Sector in IndiaImportance of Private Sector in India
Importance of Private Sector in India
 
Different problems faced by the private sector
Different problems faced by the private sectorDifferent problems faced by the private sector
Different problems faced by the private sector
 
A Presentation on Public Sector Undertakings in India
A Presentation on Public Sector Undertakings in IndiaA Presentation on Public Sector Undertakings in India
A Presentation on Public Sector Undertakings in India
 
Industrialization in Bangladesh
Industrialization in BangladeshIndustrialization in Bangladesh
Industrialization in Bangladesh
 
Mayur group
Mayur groupMayur group
Mayur group
 
The Review of Industrial Policies in Bangladesh from 1971 - 2014
The Review of Industrial Policies  in Bangladesh from 1971 - 2014The Review of Industrial Policies  in Bangladesh from 1971 - 2014
The Review of Industrial Policies in Bangladesh from 1971 - 2014
 
Financing for development
Financing for developmentFinancing for development
Financing for development
 
Economics - Over dependence On Service Sector Ppt - Done By Eco Grp
Economics - Over dependence On Service Sector Ppt - Done By Eco GrpEconomics - Over dependence On Service Sector Ppt - Done By Eco Grp
Economics - Over dependence On Service Sector Ppt - Done By Eco Grp
 
Industrial sector of Bangladesh
 Industrial sector of Bangladesh Industrial sector of Bangladesh
Industrial sector of Bangladesh
 
Role of public and private
Role of public and privateRole of public and private
Role of public and private
 
Indian Economy between 1950 to 1990, Class XII
Indian Economy between 1950 to 1990, Class XIIIndian Economy between 1950 to 1990, Class XII
Indian Economy between 1950 to 1990, Class XII
 
A Report on Public Sector Undertakings in India
A Report on Public Sector Undertakings in IndiaA Report on Public Sector Undertakings in India
A Report on Public Sector Undertakings in India
 
Economy of china
Economy of chinaEconomy of china
Economy of china
 

Similar to New microsoft office power point presentation

Making India a global hub an Artical writen by Raghuram G Rajan
Making India a global hub an Artical writen by Raghuram G RajanMaking India a global hub an Artical writen by Raghuram G Rajan
Making India a global hub an Artical writen by Raghuram G Rajan
Subin Suresh
 
Role of Advertising in Indian Economy
Role of Advertising in Indian EconomyRole of Advertising in Indian Economy
Role of Advertising in Indian Economy
M.V.L.U. COLLEGE
 
India and Unites States economic outlook
India and Unites States economic outlookIndia and Unites States economic outlook
India and Unites States economic outlook
shereenameri
 
Make in india challenges and prospects
Make in india  challenges and prospectsMake in india  challenges and prospects
Make in india challenges and prospects
Georgi Mathew
 
Bridging thegapindiaus
Bridging thegapindiausBridging thegapindiaus
Bridging thegapindiaus
drsigler
 
LPG.pdf
LPG.pdfLPG.pdf
LPG.pdf
bobo-gogo
 
Liberalization Privatization Globalization (LPG)
Liberalization Privatization Globalization (LPG)Liberalization Privatization Globalization (LPG)
Liberalization Privatization Globalization (LPG)
mayankravi
 
LPG1991, NEP of India, Zilingo, Pre reforms scenario
LPG1991, NEP of India, Zilingo, Pre reforms scenario LPG1991, NEP of India, Zilingo, Pre reforms scenario
LPG1991, NEP of India, Zilingo, Pre reforms scenario
PROF. PUTTU GURU PRASAD
 
economics.pptx
economics.pptxeconomics.pptx
economics.pptx
KartikLonkar
 
India shining
India shiningIndia shining
India shining
Arbaaz khan
 
Impact of globalisation on business, government and society
Impact of globalisation on business, government and societyImpact of globalisation on business, government and society
Impact of globalisation on business, government and society
geoffrey-cip
 
LPG
LPG LPG
LPG Model.pptx....................................
LPG Model.pptx....................................LPG Model.pptx....................................
LPG Model.pptx....................................
MalkeetSingh85
 
Epgp (one year) 2009-10_mos_ assignment_#1_18jan10
Epgp (one year) 2009-10_mos_ assignment_#1_18jan10Epgp (one year) 2009-10_mos_ assignment_#1_18jan10
Epgp (one year) 2009-10_mos_ assignment_#1_18jan10Rajendra Inani
 
Bridge to India
Bridge to IndiaBridge to India
Bridge to India
Ravi Thomas MBA, PMP
 
relation between economics and politics
relation between economics and politicsrelation between economics and politics
relation between economics and politicsMegha Chawla
 
ECONOMIC_ENVIRONMENT_PPT.ppt
ECONOMIC_ENVIRONMENT_PPT.pptECONOMIC_ENVIRONMENT_PPT.ppt
ECONOMIC_ENVIRONMENT_PPT.ppt
Tanisha883286
 

Similar to New microsoft office power point presentation (20)

Making India a global hub an Artical writen by Raghuram G Rajan
Making India a global hub an Artical writen by Raghuram G RajanMaking India a global hub an Artical writen by Raghuram G Rajan
Making India a global hub an Artical writen by Raghuram G Rajan
 
Role of Advertising in Indian Economy
Role of Advertising in Indian EconomyRole of Advertising in Indian Economy
Role of Advertising in Indian Economy
 
India and Unites States economic outlook
India and Unites States economic outlookIndia and Unites States economic outlook
India and Unites States economic outlook
 
Make in india challenges and prospects
Make in india  challenges and prospectsMake in india  challenges and prospects
Make in india challenges and prospects
 
Bridging thegapindiaus
Bridging thegapindiausBridging thegapindiaus
Bridging thegapindiaus
 
LPG.pdf
LPG.pdfLPG.pdf
LPG.pdf
 
Liberalization Privatization Globalization (LPG)
Liberalization Privatization Globalization (LPG)Liberalization Privatization Globalization (LPG)
Liberalization Privatization Globalization (LPG)
 
LPG1991, NEP of India, Zilingo, Pre reforms scenario
LPG1991, NEP of India, Zilingo, Pre reforms scenario LPG1991, NEP of India, Zilingo, Pre reforms scenario
LPG1991, NEP of India, Zilingo, Pre reforms scenario
 
economics.pptx
economics.pptxeconomics.pptx
economics.pptx
 
India shining
India shiningIndia shining
India shining
 
Impact of globalisation on business, government and society
Impact of globalisation on business, government and societyImpact of globalisation on business, government and society
Impact of globalisation on business, government and society
 
LPG
LPG LPG
LPG
 
LPG Model.pptx....................................
LPG Model.pptx....................................LPG Model.pptx....................................
LPG Model.pptx....................................
 
Epgp (one year) 2009-10_mos_ assignment_#1_18jan10
Epgp (one year) 2009-10_mos_ assignment_#1_18jan10Epgp (one year) 2009-10_mos_ assignment_#1_18jan10
Epgp (one year) 2009-10_mos_ assignment_#1_18jan10
 
Module 4 new.pptx
Module 4 new.pptxModule 4 new.pptx
Module 4 new.pptx
 
Impact on glob
Impact on globImpact on glob
Impact on glob
 
Bridge to India
Bridge to IndiaBridge to India
Bridge to India
 
988 (1)
988 (1)988 (1)
988 (1)
 
relation between economics and politics
relation between economics and politicsrelation between economics and politics
relation between economics and politics
 
ECONOMIC_ENVIRONMENT_PPT.ppt
ECONOMIC_ENVIRONMENT_PPT.pptECONOMIC_ENVIRONMENT_PPT.ppt
ECONOMIC_ENVIRONMENT_PPT.ppt
 

Recently uploaded

A Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in EducationA Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in Education
Peter Windle
 
Thesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.pptThesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.ppt
EverAndrsGuerraGuerr
 
Lapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdfLapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdf
Jean Carlos Nunes Paixão
 
The French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free downloadThe French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free download
Vivekanand Anglo Vedic Academy
 
Palestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptxPalestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptx
RaedMohamed3
 
Guidance_and_Counselling.pdf B.Ed. 4th Semester
Guidance_and_Counselling.pdf B.Ed. 4th SemesterGuidance_and_Counselling.pdf B.Ed. 4th Semester
Guidance_and_Counselling.pdf B.Ed. 4th Semester
Atul Kumar Singh
 
Synthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptxSynthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptx
Pavel ( NSTU)
 
Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46
Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46
Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46
MysoreMuleSoftMeetup
 
Sha'Carri Richardson Presentation 202345
Sha'Carri Richardson Presentation 202345Sha'Carri Richardson Presentation 202345
Sha'Carri Richardson Presentation 202345
beazzy04
 
1.4 modern child centered education - mahatma gandhi-2.pptx
1.4 modern child centered education - mahatma gandhi-2.pptx1.4 modern child centered education - mahatma gandhi-2.pptx
1.4 modern child centered education - mahatma gandhi-2.pptx
JosvitaDsouza2
 
Home assignment II on Spectroscopy 2024 Answers.pdf
Home assignment II on Spectroscopy 2024 Answers.pdfHome assignment II on Spectroscopy 2024 Answers.pdf
Home assignment II on Spectroscopy 2024 Answers.pdf
Tamralipta Mahavidyalaya
 
Embracing GenAI - A Strategic Imperative
Embracing GenAI - A Strategic ImperativeEmbracing GenAI - A Strategic Imperative
Embracing GenAI - A Strategic Imperative
Peter Windle
 
Unit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdfUnit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdf
Thiyagu K
 
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...
Levi Shapiro
 
The approach at University of Liverpool.pptx
The approach at University of Liverpool.pptxThe approach at University of Liverpool.pptx
The approach at University of Liverpool.pptx
Jisc
 
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
Nguyen Thanh Tu Collection
 
The geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideasThe geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideas
GeoBlogs
 
Model Attribute Check Company Auto Property
Model Attribute  Check Company Auto PropertyModel Attribute  Check Company Auto Property
Model Attribute Check Company Auto Property
Celine George
 
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXXPhrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
MIRIAMSALINAS13
 
Language Across the Curriculm LAC B.Ed.
Language Across the  Curriculm LAC B.Ed.Language Across the  Curriculm LAC B.Ed.
Language Across the Curriculm LAC B.Ed.
Atul Kumar Singh
 

Recently uploaded (20)

A Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in EducationA Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in Education
 
Thesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.pptThesis Statement for students diagnonsed withADHD.ppt
Thesis Statement for students diagnonsed withADHD.ppt
 
Lapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdfLapbook sobre os Regimes Totalitários.pdf
Lapbook sobre os Regimes Totalitários.pdf
 
The French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free downloadThe French Revolution Class 9 Study Material pdf free download
The French Revolution Class 9 Study Material pdf free download
 
Palestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptxPalestine last event orientationfvgnh .pptx
Palestine last event orientationfvgnh .pptx
 
Guidance_and_Counselling.pdf B.Ed. 4th Semester
Guidance_and_Counselling.pdf B.Ed. 4th SemesterGuidance_and_Counselling.pdf B.Ed. 4th Semester
Guidance_and_Counselling.pdf B.Ed. 4th Semester
 
Synthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptxSynthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptx
 
Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46
Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46
Mule 4.6 & Java 17 Upgrade | MuleSoft Mysore Meetup #46
 
Sha'Carri Richardson Presentation 202345
Sha'Carri Richardson Presentation 202345Sha'Carri Richardson Presentation 202345
Sha'Carri Richardson Presentation 202345
 
1.4 modern child centered education - mahatma gandhi-2.pptx
1.4 modern child centered education - mahatma gandhi-2.pptx1.4 modern child centered education - mahatma gandhi-2.pptx
1.4 modern child centered education - mahatma gandhi-2.pptx
 
Home assignment II on Spectroscopy 2024 Answers.pdf
Home assignment II on Spectroscopy 2024 Answers.pdfHome assignment II on Spectroscopy 2024 Answers.pdf
Home assignment II on Spectroscopy 2024 Answers.pdf
 
Embracing GenAI - A Strategic Imperative
Embracing GenAI - A Strategic ImperativeEmbracing GenAI - A Strategic Imperative
Embracing GenAI - A Strategic Imperative
 
Unit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdfUnit 8 - Information and Communication Technology (Paper I).pdf
Unit 8 - Information and Communication Technology (Paper I).pdf
 
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...
 
The approach at University of Liverpool.pptx
The approach at University of Liverpool.pptxThe approach at University of Liverpool.pptx
The approach at University of Liverpool.pptx
 
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
 
The geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideasThe geography of Taylor Swift - some ideas
The geography of Taylor Swift - some ideas
 
Model Attribute Check Company Auto Property
Model Attribute  Check Company Auto PropertyModel Attribute  Check Company Auto Property
Model Attribute Check Company Auto Property
 
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXXPhrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
 
Language Across the Curriculm LAC B.Ed.
Language Across the  Curriculm LAC B.Ed.Language Across the  Curriculm LAC B.Ed.
Language Across the Curriculm LAC B.Ed.
 

New microsoft office power point presentation

  • 1. GROWTH OPPORTUNITIES AND HURDLES IN INDIA How has India’s economic growth been portrayed in the media?
  • 2. The Indian situation •Second largest population in the world i.e 1.22 bn • Very successful service sector 9.4%, but a poorly performing industrial sector 7% • Geographic economic disparity • Democratic government & traditions • Strong financial institutions
  • 3. The traditional growth pattern • The traditional economic growth recipe relied heavily upon industrial sector expansion • Industrial growth can lift a large proportion of a country’s population out of poverty • Industry brings in capital and encourages infrastructural development •Export-driven growth is useful for developing Countries
  • 4. Why services grew but not industry? • In 1981, India’s industrial sector was on par with those of other countries. • At that time, its service sector actually lagged (in terms of the value-added as a percent of GDP and in terms of employment share) • However, at that time India did not favor labor intensive industry in 1981; it instead favored skill intensive industry Value-added by labor intensive industry Value-added by non-labor intensive industry
  • 5. What Can India Do? • The lagging states need to follow a more traditional pattern of growth: labor-intensive Manufacturing • Easier to employ the masses •Easier to export manufactured goods • What has prevented India from doing such a thing in the first place? Harmful regulation is the primary culprit.
  • 6. India’s pathway to growth • Dual-track growth: industrial growth in the inland states alongside continued service-sector expansion •Pruning regulations and labor laws relating to manufacturing - Allow people to be fired - Encourage industrial firms to achieve economies of scale •domestic industry to become competitive in the international marketplace • Investing in education, especially in primary and secondary education for the general public • Investing in public infrastructure • Focus on aiding industry
  • 7. Takeaways • Indian growth stems primarily from its service sector • Capital has had relatively small role in Indian growth • The British left strong institutions, but their legacy inspired harmful regulations and policies • The key to improving the Indian growth rate, and to minimizing economic disparity, is industrial reform • Corruption levels are actually better than those of comparator countries