In their book, Breaking the Mould: Reimagining India’s Economic Future, Raghuram Rajan and Rohit Lamba recommend that India give up its policies to build its manufacturing sector and jump straight to export more high-end services. This is surprising because this is what India has been trying to do in the last 30 years, with very poor outcomes. Insufficient jobs and incomes are the Achilles heel of India’s economy.
The signs are visible outside economists’ datasets, in the social and political arenas. Farmers are demanding better prices and informal sector workers and contract workers, fair wages and social security. The economy cannot be in good shape when 60% of Indians, cutting across castes and religions, are classified as “economically weaker sections” entitled to job reservations.
