ABSTRACT
This chapter discusses the stagnant contribution of the manufacturing sector to the Indian economy. The relevance of manufacturing for sustained growth is explained, in particular for job creation. It is highlighted that disregarding the relevance of specific characteristics such as the domestically available factors of production in the process of structural transformation leads to sub-optimal outcomes through inadequate absorption of employment. Accordingly, it is recommended to assess the factor-based aspects of structural transformation for more evenly distributed growth and benefits. It is also important to highlight the existing differences in the structural relationships of organised and unorganised manufacturing segments. The impact of the production factors on the structure of industrial output is emphasised for realising a growth-supporting sectoral composition.
