London/New York: Last week's West Bengal budget, the new BJP government's first, puts industrial revival back at the centre of the state's economic debate. The priority is clear: generating productive employment. The disagreement is about how to get there. A common assumption is that the route runs through manufacturing. Global trends, and conditions specific to India and to Bengal, make it worth asking whether that is the right path to lead with.
Globally, manufacturing is no longer a job-creating engine it once was. It has grown skill- and capital-intensive. Even where it succeeds, it creates far fewer jobs than it did for earlier industrialisers. India has felt this directly. Organised manufacturing has largely been stagnant, and where it has expanded, it did so with rising capital intensity, and output growth has not reliably translated into jobs.
