The industrial revolution in England transformed England — it took away surplus population from agriculture to manufacturing. The same process has been underway in East Asia, South East Asia and in China. In all countries, manufacturing has moved forward.

India has moved forward in manufacturing but we have not performed the task of taking a lot of the surplus population from agriculture to industry. I think governmental regulations, a mindset where government knew better than everybody else what is good for the country, excessively capital-intensive design of the developmental process and also the rigidities of the labour legislation that we have, have created a situation where we have industry but it does not grow at a fast enough pace to create a lot more jobs for our young.

And therefore, problems of labour rigidity and labour flexibility are still hurdles in India realising its chosen destiny. I cannot believe that India’s economic and social problems would be solved only in the framework of remaining a rural economy. Rural development is essential — it is essential to make our growth process inclusive. But if we have to aspire to be a major nation of the world, a powerhouse of the world economy, India has no alternative but to be a strong manufacturing nation, the type of manufacturing that creates a lot more jobs in the process.

We have done well in recent years. But I have always said growth is not an end in itself. It is only a means to enable our people to lead a life of dignity and self-respect. And unless people at the lowest rung of the socio-economic ladder can become active partners in processes of growth and development, I think we cannot rest content.

... contd.