Perhaps the biggest failure of India’s development and an equally big puzzle is why India has under-performed in labour-intensive manufacturing whether measured in terms of output, exports or employment.
For example, India’s share of global apparel exports was 3 per cent in 2005 and almost two decades later, despite China’s vacating its export space, it remained at 3 per cent.
Explanations abound on this under-performance. One of the prominent ones relates to plant size, in particular that Indian plants are kept too small by regulations, especially labour laws. In our latest research, we discover a new clue
