ABSTRACT
This chapter explores the evolution of India’s industrialization since independence, and assesses the impact of alternative policy regimes on the pace and pattern of industrialization. Industrialization during the 60 years since independence may be periodized in two alternative ways: in terms of episodes of growth and deceleration; and in terms of the policy regime in place. The Indian economy at independence was predominantly agrarian, with mining, manufacturing and small enterprises contributing around 17 per cent of national income and less than 10 per cent of employment. The other effect of state-engineered industrialization was the growing reliance on imports, which led to a worsening of India’s balance of payments position. High levels of protection and the Mahalanobis strategy notwithstanding, India’s dependence on imports of basic and intermediate-stage goods increased substantially over the second plan period. The pre-emptive behaviour of the business group had a number of implications.
