ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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National Manufacturing Policy: Making India a Powerhouse?

The 2011 National Manufacturing Policy is yet another attempt at accelerating growth in the manufacturing sector and push job creation in the area. In what way is this policy different from the many individual policy announcements of the past and what chance is there of it making a difference?

Sunil Mani ( is at the Centre for Development Studies, Thiruvananthapuram.

It is well known that unlike in China, much of India’s growth performance in the recent years has been contributed by the services sector which consists of an assortment of sub-sectors ranging from the celebrated information, communication and technology (ICT) services sector to the more mundane public administration and defence. But history has shown us that most countries in the developed world and even in the developing world (such as Korea, China and indeed the group of countries that is usually referred to as the Asian tigers) have all had sustained economic growth by focusing more on the manufacturing sector where output is more tangible and where most of the innovations are first generated.

The recent global financial crisis has shown us that the growth performance of the services sector in general and the financial services sector in particular can be illusory and at least some of the innovations especially in the financial sector are highly suspect and subject to varying interpretations. In fact there are very few countries in the world which have shown sustained economic growth of respectable magnitudes by just focusing on the services sector.

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