Should India choose manufacturing over services?
The HinduEarlier this week, the former Governor of the Reserve Bank of India, Raghuram Rajan, questioned the Central government’s production-linked incentive scheme, arguing that it works against the interests of Indian consumers. In doing so, he revived the larger debate on the government’s efforts to promote the country’s manufacturing sector through subsidies, and on its relative importance vis-a-vis the services sector. Ajay Shah and Nagesh Kumar discuss this issue and talk about creating enabling conditions, in a discussion moderated by Prashanth Perumal J. Edited excerpts: Should government policy focus on promoting any particular sector of the economy? In such a context, the Centre’s decision to promote the manufacturing sector is timely because India has favoured an agriculture and services-dominated economy over the years.
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