We, don’t bother our own Sen’s model of growth, why bother about Arthur Lewis at all?

As China chugs into its demographically destined territory, its journey has implications for India’s industrialisation policy. Over past 20 years, the share of India’s industry has remained constant at around 20 per cent. Large growth in industrial output and employment is missing. It is not as if the Lewis model has bypassed India, but India’s policy constantly seems to thwart Lewis. It could be labour laws which prevent large-scale flexible employment. It could be small scale reservation, which thankfully is reducing. It could be the fragmented fiscal federation which denies us a fully integrated common economic market. It could be inadequate financial inclusion which keeps many micro, small and medium enterprises excluded from finance. Or it could simply be due to the fact that our polity is very different from China’s. But the fact is that the demographic window which is closing for China won’t be open for India for too long. And we don’t want to be the economy which disproved Arthur Lewis!