Book Chapter
Inclusive structural transformation in India

This chapter analyses the ‘Developer’s Dilemma’ as it manifested itself in post-independence India. We identify two distinct developmental episodes during this period and characterize them as ‘inclusion without growth’ and ‘growth without inclusion’ respectively.

We argue that the trade-off in each of these episodes is explained by the political economy and the economic ideology during that period, which in turn, drive the economic policy regimes and economic performance. We draw a few conclusions.

First, economic ideology played an important role in driving structural transformation in India. Second, structural transformation did not lead to manufacturing-based industrialization in India due to increasing political competition. Third, the lack of manufacturing growth exacerbated inequality and intensified the dilemma in the Indian context.

Finally, we predict three alternative trajectories that structural transformation and inequality may take in future.