Ideology and industrialization in India and East Asia
Lal, Deepak
This paper discusses Indian industrialization in historical and comparative perspective. It illustrates that Indian industrialization was impressive relative to both other developed and developing countries in the 19th century. With, however, the introduction of protective labor legislation in the 1880's and the emergence of protectionism after the First World War Indian industrialization began to falter. It shows that many popular explanations are not borne by the facts. It then discusses how for ecological reasons, as contrasted with the East Asian countries, India's import substitution in intermediate and capital goods has made it difficult for it to adopt the virtual free trade regime for exporters common in East Asia. Finally, it provides reasons why despite the hold of ideology, the impending fiscal crisis may lead to some liberalization of internal (industrial and price) but not necessarily external (trade) controls.
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