It is an established fact that that manufacturing is the key driver of economic growth in any successful economy. Industrialisation catapulted the United States and many European countries to the status of developed nations in 1900s. Soon after independence, India also made a fine attempt to accelerate the process of industrialisation.

While the country developed core industries such as iron and steel, heavy engineering and electricals from the second plan, it had pursued an inward-looking import substitution strategy and not an export-driven one, thereby unable to gain foothold in manufacturing at a global playing field. The mid-1980s and more specifically from the 1990s drove the importance of liberalisation, which led to the opening up of the economy. This brought back focus on manufacturing. But there was a substantial time-lag of three decades in terms of any meaningful industrialisation.

With a population second to China, and substantial human capital with a robust technically-trained workforce and the labour cost advantage, India was ideally slated to emerge as a dominant player in labour-intensive sectors. This would have generated the much-needed employment. In reality, we are far behind most of our neighbours put aside some sectors like textiles, gems and jewellery. Our growth has been largely propelled by agriculture and the services sector. The contribution of manufacturing to our GDP is now less than 16 percent and our contribution to the global manufacturing value added is just 1.8 percent.

This is much less compared to other Asian countries. In China, manufacturing sector boasts of contributing 30 percent of the GDP. China accounted for around 23.3 percent of the global manufacturing value added in 2011. Even smaller economies in the region like Thailand, Malaysia and Indonesia fare much better. Manufacturing accounts for 36 percent, 25 percent and 25 percent respectively in these countries. So, with a huge resource pile - both natural and human, why are we not able to make a cut in manufacturing?