ABSTRACT
This chapter examines the challenges faced by Indian manufacturing over the years, especially in regard to employment creation. It begins with an examination of the early phase of state-led industrialisation in India and discusses an evaluation of "jobless growth" in Indian manufacturing during the 1980s and the impact of the 1991 economic reforms on Indian industry. The chapter reviews the major constraints currently facing Indian manufacturing and explains why the manufacturing sector in India has had only a limited impact on the country's development, especially in regard to employment creation. It argues the slow growth of India's manufacturing sector has been largely due to a combination of external factors and inadequate policy responses on the part of the Indian government. Since 2011—12, India's domestic private firms have been reducing their levels of investment, partly because of the slowdown in demand at home and abroad, and the unutilised capacities they had built during the previous years.
