India’s manufactured problem
- Arvind Panagariya
- Updated: Aug 29, 2024, 20:47 IST IST
Notwithstanding the fact that industrialisation was the centrepiece of Nehru’s development strategy, manufacturing continues to struggle in India. Why?
If I were to pick a single factor to answer this big question, I would point the finger at our failure to make genuinely effective use of the most plentiful factor of production: labour. After 75 years of development effort, 85% of our workforce remains employed in agriculture or enterprises with fewer than ten workers, where value added per worker remains low. Effective use of this vast labour force and the success of manufacturing are intimately linked.
If I were to pick a single factor to answer this big question, I would point the finger at our failure to make genuinely effective use of the most plentiful factor of production: labour. After 75 years of development effort, 85% of our workforce remains employed in agriculture or enterprises with fewer than ten workers, where value added per worker remains low. Effective use of this vast labour force and the success of manufacturing are intimately linked.
