Back in 1951 India’s then prime minister Jawaharlal Nehru announced that India had to become industrialized, and that as fast as possible. While the politicians have done everything they could since then, including Soviet-like planning, to industrialize the country, India has yet to become a manufacturing powerhouse like China. Indians seems more willing to grow crops and sell services than manufacture advanced products and machines.
While India’s economy had recorded impressive growth rates over the past decades, most of growth came from the service sector, and their overall performance is still being dragged down by an underperforming manufacturing sector, resulting in their current growth rate being reduced to 6.5 percent compared to the previous 8.5 percent. It’s still an impressive performance compared to other countries, but it could have been so much better. (more…)