Manufacturing-led growth
Topic: Comparative Development: India, China and Pakistan · NCERT: Class 11, Ch 8 "Comparative Development Experiences of India and its Neighbours"
Meaning
Manufacturing-led growth means that industry drives a country's economic growth, with services playing a supporting role. China is the leading example. It followed the classical path: agriculture → industry → services. Manufacturing creates jobs for large numbers of low-skilled workers, links up with other sectors and boosts exports. That is why many people argue that India should also build up its manufacturing.
Example
China's industry grew by 10.8% a year in 1980-90. In 2022, industry produced 38% of China's GVA (Gross Value Added: the value of output minus the inputs used) and employed 32% of its workers. In India in 2022, industry produced 28% of GVA and employed 26% of workers.
Don't confuse with
- Service-led growth: Growth is driven mainly by services such as IT and business services. India and Pakistan moved directly from agriculture to services, skipping a large manufacturing phase. India's services growth rose from 6.9% (1980-90) to 7.6% (2014-18).