We often acknowledge the fascinating changes around us – changes embedded in a globalised world with increased trade and interdependence between nations, speed and depth of communication, innovation in technology, sharing of knowledge, movement of people across borders, rise of the global middle class, and homogenisation of culture and lifestyles. Glitches in the growth process, episodes of slowing down, rising inequality, delinking growth and employment, financialisation, and dwindling growth in physical investment are seen as reconcilable perturbations within the larger picture of a stable and ubiquitous capitalism. The Indian story appears to be even more exciting. It is no longer about just ‘catching up’ with the North. With consistent high growth, the two Asian giants, India and China, seem to have emerged as the drivers of global growth in the recent past. In the case of India, a major concern of policy-makers and experts is the industrialisation conundrum amid high growth. Though services contribute a major share, in terms of output and employment, a stagnant manufacturing sector is worrisome. In large democracies like India, the distribution of growth is directly linked to the electoral fortunes of contesting political parties as rising inequality beyond a point leads to social tensions and resentment against the ruling establishment. Though the relation between political outcome and economic performance need not be linear, pitting growth against distribution, the doctrine of gains trickling down, and the patience of the majority of people waiting for market-driven desired outcomes seem to have lost steam.
The policy discourse in this regard has been largely confined to certain broad binaries: state versus market when it comes to economic mediation; to promote public or private sectors; services or manufacturing sector to drive the desired growth path; inward- or outward-looking policies on the question of degree of openness; regulate finance to redirect capital flow towards productive sectors or enjoy the swings of speculation; relax labour laws for flexibility, or provide social security to unprotected workers; and so on. Industry requires land and minerals and the state has to be decisive in releasing the supply side constraints. Therefore, land that has so far been used for low-productivity agriculture has to be transformed – forcibly, if required – towards high-productivity industrial activities.