We see a lot of policies in favour of services and creating disadvantages for industries.
Mahalanobis’s Model (Policy) → Capital goods (Heavy Industries) → Tertiary Education (Engineering colleges) → Primary & Secondary Education (Neglected) → Farm & Factory suffered
Mahalanobis’s Strategy Of Industrialization led the foundation for capital goods Industries in India, which required huge government investment both in Industry as well as in tertiary education. In the process, primary and secondary education suffered. These policies made skilled labor readily and economically available, whereas the low-skilled labor force became relatively expensive.
Services were lightly taxed then manufacturing, trade, and foreign investment. Policies have been favorable to services than compared to manufacturing.
India does not have a coherent service sector policy. So the balance between agriculture, Industries, and services could not be created.
Lack of physical infrastructure like roads affects the industries far more than services.