A Potent Panacea for Growth

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Barriers to Economic Growth The early years of Independence witnessed a sincere commitment to revive the manufacturing sector under the first government of independent India. But two factors acted as speed breakers for an economy rearing to go. The first was the over-emphasis on a Socialist agenda and policies influenced by the Soviet economic model. The second was the overwhelming controls on the economy, leading to the infamous licence-quota Raj that restricted the free entry of players into most sectors. Thankfully, the country’s economy has undergone considerable metamorphosis over some 70 years.
The manufacturing sector in India has had a long and arduous journey, spinning around its textile and other industries success stories and commendable performances, which came about not because of, but in spite of, the governments of the day. Sadly, due to sequential, anti-growth factors such as the lack of adaptability to modern means of production, poor incentives, regressive taxation and other laws as well as crippling trade unionism, to list only a few, industry in general lost its steam, and began performing far below its potential.

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