India’s economy is often described as one of the fastest-growing in the world. Yet beneath this impressive surface lies a quieter and more troubling reality. India has grown, but it has not fully transformed. The gap is not one of ambition or talent — it is structural.
Most successful development stories follow a clear path: workers move from farms to factories, from low-productivity work to mass manufacturing, and only then into higher-value services. This process does more than raise GDP. It
creates jobs at scale, absorbs surplus labour, and builds a broad middle class. India attempted a leap. It built a strong services sector without first establishing a large manufacturing base. The result is an economy with islands of excellence and a vast informal underbelly.
This explains why high growth has not translated into mass employment. Millions enter the workforce each year, yet too few stable and productive jobs are created. Services-led growth rewards skills at the top but cannot absorb workers at the scale factories once did. An economy that neglects labour-intensive manufacturing risks becoming both unequal and fragile. It is dynamic at the summit, but stagnant at the base.
The condition of India’s cities is equally worrying. Urban centres should be engines of growth — places where infrastructure, skills, capital, and ideas converge. Instead, Indian cities are treated largely as administrative units rather than economic drivers.
They lack financial autonomy, political authority, and managerial capacity. Mayors are weak, municipal finances strained, and key decisions remain concentrated at higher levels. The consequences are visible every day: congestion, unreliable services, inadequate housing, and chaotic land use.
This is not merely an urban planning failure — it is an economic one. Manufacturing clusters require efficient cities. Workers need transport, sanitation, safety, and housing. Firms need power, logistics, and predictable local governance. When cities cannot deliver these basics, industries remain small and fragmented. Job creation slows not due to a lack of enterprise, but because the ecosystem does not support scale.
India’s political system deserves credit for preserving national unity and macroeconomic stability in a diverse society. This achievement is real. But stability is not the same as development. Democracy can safeguard order and still fail to build strong everyday institutions.
Economic potential is drained by over-centralisation, weak local government, and fragile rule of law. The danger now is complacency. High growth rates can conceal deep structural flaws. Markets may celebrate quarterly numbers, but development is measured in jobs, productivity, and quality of life.
Without a serious push to strengthen cities and revive labour-intensive manufacturing, India risks locking itself into jobless growth and rising social strain.
Add new comment