78 Years of Freedom

The Narendra Modi government’s quest to bolster the domestic manufacturing sector is not the first time a government has tried this. In fact, the manufacturing sector has been the focus of government policy — in one way or the other — ever since 1956, to relatively modest success.

At the time of Independence or thereabouts, the Indian economy looked very different from its current state both in terms of size as well as composition. At the time, agriculture was the overwhelmingly dominant driver of the economy, contributing about half of the country’s Gross Domestic Product (GDP), as per data with the Reserve Bank of India.

The nascent manufacturing sector, on the other hand, made up about 11% of the GDP. Now, the services sector has taken over the dominant role vacated by agriculture, while manufacturing has remained largely where it was.

The first Five Year Plan (1951-56) focused on the idea of increasing domestic savings, since it was presumed that higher savings would directly translate into higher investments. This policy, however, ran into a fundamental problem: investments could not materially increase as the country did not have a domestic capital goods producing sector.

The second Five Year Plan (1956-61), based on the ideas of PC Mahalanobis, and successive Plans sought to address this by increasing investments in the capital goods producing sectors themselves. The idea was to increase government investment in capital goods production, while the micro, small, and medium enterprises (MSMEs) would cater to the consumer goods market.

As the economist and professor Aditya Bhattacharjea noted in a paper published in Springer Nature: “With long-run growth being seen as the means for reducing widespread poverty, the model provided an intellectual justification for increasing investments in the capital goods sector of a labour-abundant country.”

So, what followed was that growth rates of both investment in and output of the machinery, metals, and chemicals industries outpaced those of consumer goods industries.

The Mahalanobis model did not incorporate specific industry-wise policies, but it had a few broad themes that came to characterise India’s industrial policy over the country’s first three decades since Independence.

The first and most obvious theme was the huge role of the public sector. The feeling at the time was — not unlike what the Modi government felt in the wake of the COVID-19 pandemic — that private sector investment would not be picking up the load for some time, and so the public sector would have to do the heavy lifting.

The 1948 Industrial Policy Resolution (IPR) reserved the production of arms and ammunition for the Union government, and new investments in sectors as diverse as iron and steel, aircraft, ships, telephone, telegraph and wireless equipment were kept as the exclusive domain of central public sector enterprises.

The 1956 IPR, which came after the historic Avadi session of the Indian National Congress in 1955, expanded the reserved list to 14 sectors. The driving ideology was that the government and the public sector would assume the “commanding heights” of the economy.

The second and equally significant theme of this thought process was the use of licensing as a means to ensure that scarce resources were allocated to priority sectors.

Third, the belief was that the domestic industry would need to be protected from international competition, and this protection took the form of high tariffs — something U.S. President Donald Trump seems to have a problem with even today — and import licensing.

By 1980, the share of manufacturing in India’s GDP had grown to about 16-17%. According to some economists like Pulapre Balakrishnan, the real growth in the manufacturing sector took off from here, and not from the 1991 liberalisation, as is often assumed.

This, they said, was due to a few policy changes enacted by the government of the time: allowing up to 25% automatic expansion of licensed capacities, allowing manufacturing licences to be used to produce other items within the same broad industrial category, and significant relaxation of price controls on cement and steel.

The 1991 reforms and the resultant end of the ‘licence raj’, the opening up of the economy to the private sector and international competition further helped things, with the manufacturing sector growing strongly and contributing a steady 15-18% of a rapidly-growing GDP till about 2015.

Steep fall

That year saw a marked change, however, with the share of manufacturing in GDP consistently falling for the next decade. A major reason for this change was the non-performing assets (NPA) crisis in the banking sector. Profligate lending by banks in the 2009-14 period led to a build-up of bad loans, which came to light in 2015-18 following an Asset Quality Review of the banking sector. Such was the crisis and its fallout that bank lending to large industry virtually dried up.

This, coupled with the loan-fuelled over-capacity that had been created during the 2009-14 period meant that companies did not need to invest in additional capacity to meet demand, and could not find adequate credit even if they wanted to invest.

Underpinning all of this was the increased reliance on imports from China, which virtually converted large parts of Indian manufacturing into assembly and repackaging units. Of course, the COVID-19 pandemic also severely hampered both demand and investments in India.

The Modi government’s Make in India efforts, thus, could not prevent the share of manufacturing in GDP falling from 15.6% in 2015-16 to 12.6% in 2024-25 — the lowest share in 71 years.

Another problem faced by the Modi government, something all previous governments also faced, was that a lot of the reforms to drive manufacturing were needed at the State level. So, while the Union government has put in place the framework for land and labour reforms that could potentially increase the scale of Indian manufacturing, they are held up as most State governments are not cooperating.

The services sector, on the other hand, has gone from strength to strength on the back of the IT boom. So, where services made up 37% of the GDP in 1950, this grew to 42% by 1996-97. Thereafter, the acceleration was rapid, with the sector now making up nearly 58% of the GDP.

So, 78 years after Independence, the manufacturing sector remains an also-ran in India’s growth story, despite fervent attempts by government after government. The services sector, on the other hand, has blossomed outside the government’s focus.

Published – August 15, 2025 03:26 am IST

Since Independence, India has drawn on science and technology as key pillars of the nation-building process. The vision of its first leaders, but especially Jawaharlal Nehru, was to foster a rational temper among the populace, empowering citizens not only to adopt technological advancements but also to imbue everyday life and national development with evidence-based reasoning and inquiry. The Constitution encodes the development of “scientific temper, humanism, and the spirit of inquiry and reform” as a fundamental duty of every Indian.

Immediately after Independence, India made significant investments in scientific institutions, research laboratories, and educational establishments, leading to the founding of the IITs, the Council of Scientific and Industrial Research, and the Indian Space Research Organisation, among others.

The planned economy, the Green Revolution, and liberalisation all banked on scientific solutions and deployed expert knowledge across agriculture, infrastructure, and industry. The ecosystem for research and innovation that resulted is today exemplified by achievements in spaceflight, pharmaceuticals, digital technologies, and renewable energy. Innovations in the form of household appliances, electronic goods, and telecom and Internet connectivity have also diffused into daily life.

Despite these advances, however, there continues to be a tension between technological adoption and the prevalence of irrational attitudes at multiple levels of Indian society.

While Indians readily embrace new technologies, scientific temper remains confined to a few pockets. Superstitions, pseudoscience, and magical thinking persist in mainstream culture, sometimes melding with religious practices and customs to the detriment of rationality. While Prime Minister Narendran Modi himself has claimed that the Hindu god Ganesha’s form proved ancient expertise in plastic surgery, Ministers have promoted the idea that cow urine can cure cancer. Former Education Minister Satya Pal Singh once threatened to remove Darwin’s theory of evolution from textbooks, saying no Indian text supports “monkeys turning into humans”.

At the Indian Science Congress, some scientists have advocated renaming gravitational waves as “Modi waves”. Mass superstitions have often triggered widespread panic, such as rumours that witches were cutting off women’s braids, eliciting violent community reactions. Belief in the “miraculous: healing powers of individuals are widespread in spite of multiple “godmen” like Gurmeet Ram Rahim Singh and Asaram Bapu having been exposed as fraudsters.

While social media continues to amplify the spread of pseudoscience and conspiracy theories related to health and history, policy discourse sometimes relies more on political expedience or parochial interests than on scientific advice. Attitudes towards climate change, pollution, and environmental degradation are often apathetic despite clear scientific warnings.

While India’s elite scientific institutions are globally competitive, the quality of science education at school and college levels is inconsistent. The gap between rote-based learning and genuine scientific inquiry and problem-solving scepticism endures. The ability to reason critically and challenge dogma has not been cultivated widely, leaving segments of the populace susceptible to misinformation.

The media’s role has also been mixed. While there are commendable public science communication efforts and popularisation initiatives, there is a greater amplification of pseudoscience and anti-intellectualism. High-profile personalities sometimes even misuse platforms to spread unscientific claims, which go unchallenged due to deference to authority or lack of public understanding. Legal and regulatory mechanisms to curb pseudoscience, fraudulent miracle cures, and exploitative practices remain inadequate or inconsistently applied.

In a society where tradition, religion, and modernity rub shoulders, scientific temper is not an attack on faith or tradition but the ability to question and test ideas irrespective of source. Many Indians hold rational views in aspects of life directly shaped by science yet default to tradition or non-scientific authority in other spheres. Merely adopting a technology is not synonymous with adopting scientific temper. Rationality encompasses a broader outlook, including evidence-based reasoning and the courage to question received wisdom.

So while India has made considerable scientific and technological progress, it has not done so as a people moved by the constitutional spirit. Bridging the gap between technological advances and internalised scientific temper demands both institutional action and collective cultural transformation.

To this end, India must revamp science education to emphasise critical thinking over rote learning and strengthen science communication and public outreach to make scientific knowledge accessible and engaging. Vital areas like healthcare, climate action, and social justice must be guided by evidence-based policymaking. The government should also promote interdisciplinary approaches in academia that blend Humanities and sciences to nurture empathy.

Published – August 15, 2025 12:15 am IST

Since Independence, India has drawn on science and technology as key pillars of the nation-building process. The vision of its first leaders, but especially Jawaharlal Nehru, was to foster a rational temper among the populace, empowering citizens not only to adopt technological advancements but also to imbue everyday life and national development with evidence-based reasoning and inquiry. The Constitution encodes the development of “scientific temper, humanism, and the spirit of inquiry and reform” as a fundamental duty of every Indian.

Immediately after Independence, India made significant investments in scientific institutions, research laboratories, and educational establishments, leading to the founding of the IITs, the Council of Scientific and Industrial Research, and the Indian Space Research Organisation, among others.

The planned economy, the Green Revolution, and liberalisation all banked on scientific solutions and deployed expert knowledge across agriculture, infrastructure, and industry. The ecosystem for research and innovation that resulted is today exemplified by achievements in spaceflight, pharmaceuticals, digital technologies, and renewable energy. Innovations in the form of household appliances, electronic goods, and telecom and Internet connectivity have also diffused into daily life.

Despite these advances, however, there continues to be a tension between technological adoption and the prevalence of irrational attitudes at multiple levels of Indian society.

While Indians readily embrace new technologies, scientific temper remains confined to a few pockets. Superstitions, pseudoscience, and magical thinking persist in mainstream culture, sometimes melding with religious practices and customs to the detriment of rationality. While Prime Minister Narendran Modi himself has claimed that the Hindu god Ganesha’s form proved ancient expertise in plastic surgery, Ministers have promoted the idea that cow urine can cure cancer. Former Education Minister Satya Pal Singh once threatened to remove Darwin’s theory of evolution from textbooks, saying no Indian text supports “monkeys turning into humans”.

At the Indian Science Congress, some scientists have advocated renaming gravitational waves as “Modi waves”. Mass superstitions have often triggered widespread panic, such as rumours that witches were cutting off women’s braids, eliciting violent community reactions. Belief in the “miraculous: healing powers of individuals are widespread in spite of multiple “godmen” like Gurmeet Ram Rahim Singh and Asaram Bapu having been exposed as fraudsters.

While social media continues to amplify the spread of pseudoscience and conspiracy theories related to health and history, policy discourse sometimes relies more on political expedience or parochial interests than on scientific advice. Attitudes towards climate change, pollution, and environmental degradation are often apathetic despite clear scientific warnings.

While India’s elite scientific institutions are globally competitive, the quality of science education at school and college levels is inconsistent. The gap between rote-based learning and genuine scientific inquiry and problem-solving scepticism endures. The ability to reason critically and challenge dogma has not been cultivated widely, leaving segments of the populace susceptible to misinformation.

The media’s role has also been mixed. While there are commendable public science communication efforts and popularisation initiatives, there is a greater amplification of pseudoscience and anti-intellectualism. High-profile personalities sometimes even misuse platforms to spread unscientific claims, which go unchallenged due to deference to authority or lack of public understanding. Legal and regulatory mechanisms to curb pseudoscience, fraudulent miracle cures, and exploitative practices remain inadequate or inconsistently applied.

In a society where tradition, religion, and modernity rub shoulders, scientific temper is not an attack on faith or tradition but the ability to question and test ideas irrespective of source. Many Indians hold rational views in aspects of life directly shaped by science yet default to tradition or non-scientific authority in other spheres. Merely adopting a technology is not synonymous with adopting scientific temper. Rationality encompasses a broader outlook, including evidence-based reasoning and the courage to question received wisdom.

So while India has made considerable scientific and technological progress, it has not done so as a people moved by the constitutional spirit. Bridging the gap between technological advances and internalised scientific temper demands both institutional action and collective cultural transformation.

To this end, India must revamp science education to emphasise critical thinking over rote learning and strengthen science communication and public outreach to make scientific knowledge accessible and engaging. Vital areas like healthcare, climate action, and social justice must be guided by evidence-based policymaking. The government should also promote interdisciplinary approaches in academia that blend Humanities and sciences to nurture empathy.

Published – August 15, 2025 12:15 am IST