This paper analyses the long term experience of industrial growth in India, spanning the period from the First Five Year Plan to the new policy of the 1980s. Since the early 1950s the objective of public policy has been the promotion of balanced and rapid economic development with equity and justice. The main question in the 1950s was raising the rate of savings and thus the rate of investment within the framework of extensive planning. The new economic policy pursued during the 1980s, characterised by liberalisation and an elitist orientation on demand by the top two deciles as the engine of growth, has brought about various structural changes. Among others the industrial sector has become less and less sensitive to the performance of the agricultural sector. Concluding that it may still be too early to say whether the growth rate of industry can be raised in a sustainable way, the paper sees “immiserisation” of the poor as one possible disturbing outcome of present policies.
