India’s pattern of development: What happened, what follows?$

India has followed an idiosyncratic pattern of development, certainly compared with other fastgrowing Asian economies. While the importance of services rather than manufacturing has been widely noted, within manufacturing India has emphasized skill-intensive rather than labor-intensive manufacturing, and industries with higher-than-average scale (though average firm size within industries is unusually small). Some of these distinctive patterns existed prior to the beginning of economic reforms in the 1980s, and stem from the idiosyncratic policies adopted after India’s independence. These patterns have not changed despite reforms that have removed some policy impediments that contributed to India’s distinctive path. We discuss the implications for India’s future growth. r 2006 Elsevier B.V. All rights reserved.