“Industrial Policy: Not The What, But The How”, Swarajya, May 09, 2026
“Indian commentary on industrial policy has, for a decade, settled into a familiar binary. On one side, the dirigistes argue the post-1991 reforms went too far, that the state must return to its old role as architect of national capability, and that the moment of free-market triumphalism is over and the world is doing industrial policy again. On the other, the liberalisers warn that any return to state direction will revive the licence-raj instincts that crippled India for forty years, that subsidies become permanent, tariffs become rents, and “Make in India” decays into “Make in India for Indians, badly.”
Dr V Anantha Nageswaran, India’s Chief Economic Advisor, has spent the last few years quietly reframing this debate. On a recent episode of Growth is Good — the podcast produced by the Foundation for Economic Development and hosted by its founder Rahul Ahluwalia — he laid out the reframe with unusual clarity. (You can watch the podcast here.)
The debate is wrong because the premise is wrong. India is not returning to industrial policy after a hiatus. India never stopped. The post-1991 reforms scaled back the most visible instruments — licensing, public-sector dominance, sectoral reservations — but the state remained an active shaper of which industries grew, which were protected, which were taxed, and which were subsidised. What changed was the rhetoric, not the substance. And in the slow-burn forty years before 1991, when rhetoric and substance aligned, the state’s industrial policy did not merely fail. It systematically distorted the very small and medium enterprises it claimed to be nurturing……..”
Read full article at swarajyamag.com
