In this column in Mint, Vivek Dehejia, Senior Resident Fellow at IDFC Institute drills deep into the de-industrialisation debate and discusses thesis proposed by economists such as Tyler Cowen, Dani Rodrik, Arvind Subramaniam among others.

Talking about the changing nature of the structure of production, Dehejia writes, "structure of production, in both advanced and emerging economies, may tilt towards highly capital- and skill-intensive manufacturing and services, to the detriment of large-scale labour-intensive manufacturing of a type that has driven every growth miracle from Victorian-era Britain to modern-era China. Such a process, which hollows out conventional manufacturing industries and strips away remunerative blue-collar jobs, is known as “deindustrialization” in the jargon of economics...it would appear that manufacturing is peaking in emerging economies at lower levels of economic development than was the case in the presently advanced economies." In context of India, Dehejia says "manufacturing takes on greater importance for a large, labour-abundant economy such as India, not because of alleged productivity spillovers to other sectors, which may not exist, but because of its importance to employment generation."

Read the full article here.