29th November, 2015 (MAINS)


Q1. Normally countries shift from agriculture to industry and then later to services, but India shifted directly from agriculture to services. What are the reasons for the huge growth of services vis-a-vis industry in the country? Can India become a developed country without a strong industrial base? [12.5marks/2014/GS-3] 200 words.

Please write answer in the comments section.

  • Kamlesh Twari

    Main reasons for the decay of Indian industries:
    1. Absence of a strong industrial policy from late 1980’s till as late as 2011.
    2. Failure in developing required power and transport infrastructure for industrial growth.
    3. Red-tape bureaucracy, License Raj and stringent labour laws.

    Main reasons for the huge growth of services:
    1. Boom in IT industry and application of Liberalization, Privatization and Globalization model to the Indian economy.
    2. Availability of large pool of low cost highly skilled educated and English speaking workers on supply side which matched the increased
    demand from foreign countries.
    3. Global rise in demand of service sector and increasing outsourcing of services to developing countries like India.

    Main reasons why India cannot become a developed country without a strong industrial base:
    1. India has a high demographic dividend and in order to reap its benefits, the share of employment in industrial sector needs to increase.
    2. The demand of Goods and Services of huge Indian population cannot be met without a strong industrial base.
    3. There is heavy disguised unemployment in the agricultural sector which should be corrected and shifted to the manufacturing sector.
    4. India is dependent on imports for manufactured goods which leads to trade imbalance. To avoid this the Indian industrial base should be increased.

    • Umesh Sachin

      good job bro..

  • Shashank Garg

    The share of agriculture has fallen drastically since independence (from 55%in 1950 to 15% in 2014) while that of service has almost doubled (from 32% in 1950 to 62% in 2014) on the other hand the share of manufacturing has been consistently low in India.

    1. Despite having a large population that is conducive for manufacturing sector, our policies were not favourable for manufacturing sector.

    a. In initial years when growth was mainly in state hands, focus was on heavy industries and government didn’t focused on manufacturing sector which could have provided employment to the masses.

    b. The labour laws are skewed against large manufacturing establishments. Corruption and interference by labour inspectors. Tough laws for firing workers made industrialists wary of manufacturing sector and favoured service sector.

    c. Lack of infrastructure was a big roadblock for manufacturing sector like absence of cheap freight transport, credit for new entrepreneurs.

    d. Our educational policies focused on primary and higher education. Lack of availability vocational training avenues was also stifled growth of manufacturing.

    2. The large English educated urban youth was suited to become the service hub for the world especially in BPO and IT sector.

    A well spread manufacturing sector is necessary to take out the semi-skilled workers from agriculture and improving per worker productivity.