In Industrial Growth in India: Stagnation since the Mid-1960s (1985), Isher Judge Ahluwalia examines the reasons behind the prolonged stagnation in India’s industrial sector from the mid-1960s to the early 1980s. Ahluwalia identifies key structural issues, policy limitations, and institutional inefficiencies that hindered industrial growth despite the government’s ambitious development plans. She provides a detailed assessment of factors such as restrictive industrial licensing policies, excessive regulatory constraints, and the inefficiencies of public sector enterprises, which collectively stifled productivity and innovation.

Ahluwalia argues that India’s industrial policies, rooted in heavy state intervention and protectionism, created barriers to competition and discouraged private investment, particularly in critical sectors. The lack of technological advancement and limited use of capital further contributed to industrial stagnation. She points out that the industrial policy regime, which aimed to promote self-sufficiency, inadvertently led to resource misallocation and overreliance on state enterprises, limiting various sectors’ capacity to grow.