In a conversation, B Bhaskar and Nabodita Ganguly discuss India’s industrial evolution since its Independence in 1947. Despite its early industrial base, India faced challenges and adopted the Bombay Plan for economic development. The Nehruvian plan emphasised government control and economic planning, leading to a capital-intensive industrial base. However, excessive regulations and bureaucracy hindered efficiency.
The 1980s marked the shift towards liberalisation, and the 1991 reforms dismantled barriers like industrial licensing and reduced import tariffs. Despite three decades of reforms, India’s manufacturing sector’s GDP contribution remains around 15-16%. Reasons include a lack of investment in primary education and healthcare, limited R&D, and challenges in achieving a competitive workforce.
The discussion explores the impact of COVID-19 on India Inc., acknowledging the initial economic contraction and eventual recovery. The conversation delves into the complexities of free market competition, highlighting industries requiring substantial capital investments that limit the number of players.
The conversation also addresses challenges in achieving equal opportunity and discusses the relevance of the new education policy. Bhaskar concludes by reflecting on the changing global landscape since the 2008 financial crisis and the COVID-19 pandemic, suggesting that India’s economic future will be influenced by evolving global dynamics.