Rightsizing of the Large-Scale Industries in India - A Need of the Hour

The paper critically examines India’s long-standing emphasis on large-scale industries under the Nehruvian model of economic development and argues for a more balanced industrial structure. While the dominance of large-scale industries and public sector enterprises once symbolized modernization and economic self-reliance, their long-term effects have revealed deep socio-economic imbalances. The author highlights that excessive dependence on large-scale industrialization has led to displacement of craftsmen, loss of traditional livelihoods, urban overcrowding, pollution, income inequality, and moral degradation among workers. Drawing from historical shifts since the 1990s, the paper notes how policy reorientations under leaders like P.V. Narsimha Rao and Dr. Manmohan Singh marked a gradual recognition of the potential of small, medium, village, and cottage industries. Through critical analysis, it is shown that India’s population-to-land ratio, employment needs, and socio-cultural fabric make small and medium enterprises (SMEs) a more sustainable engine of inclusive growth. The study uses empirical data to illustrate how MSMEs have increasingly contributed to GDP and exports, challenging the traditional preference for large industries. It concludes that rightsizing industrial policy by reducing the overemphasis on large-scale sectors and empowering smaller ones is essential for sustainable, equitable, and employment-oriented growth. The paper advocates a paradigm shift in India’s developmental mindset toward balanced industrialization that integrates economic efficiency with social responsibility.

Large-scale industries; Industrial policy

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