Thank you, Marco, for introducing me to this book, which has quickly become one of my top reading priorities. The urgency, for me, is less about what you cover in your review — much of which, as you know, I agree with — and more about what is left out. One omission stands out: energy.
In a world where coal production and consumption are increasingly stigmatised, sometimes too hastily, India’s potential creates a binary situation: it can either make it, decisively, or break it, badly. Its demographic scale, English-speaking population, and strong education system all point to enormous promise. But in an increasingly energy-intensive world, the question of where India will source the energy needed to fulfil that promise is central.
India currently sources almost half of its total energy from coal, and around 30% from oil and natural gas. Even including nuclear, hydropower, solar, and wind, low-carbon sources remain a relatively small share of total energy supply. Coal is even more dominant in electricity generation, accounting for roughly three quarters of India’s power generation, compared with a lower share in China. If we follow Rajan and Lamba in comparing India’s trajectory with China’s, the energy numbers are not especially reassuring.
This matters even more if India intends to grow primarily through services — which would be a world first at this scale, and an impressive one. Services are not energy-free; digital infrastructure, data centres, transport, urbanisation, cooling, and reliable electricity all matter. A services-led model still requires a deep and resilient energy base.
Here is my caveat: I think the death of manufacturing as a leading force in economic development has been greatly exaggerated. The Modi administration seems to agree. Where Rajan and Lamba may differ, I suspect, is on the importance of initiatives such as the National Logistics Policy and PM GatiShakti. Their results have been less overwhelming than expected, partly because of weakening FDI inflows, but the strategic question remains: should India aim for steady growth through a healthier mix of sectors (and keep growing at 6%, which is the minimum to keep employment rate from falling), or should it push even harder into services while hoping that energy constraints, infrastructure gaps, and AI-driven disruption do not get in the way?
Thanks Luca, your point on energy fills a big gap in the book and in the discussion. I completely agree with you there. I also agree that 'the death of manufacturing has been greatly exaggerated.' It's part of the reason why I wish they had elaborated more in depth of how their strategy would work, and I think the key lies in the merging of manufacturing and services.
Some of the examples they mention in the book do include the actual manufacturing. The trick might be to go directly to higher value added manufacturing rather than starting with cheap, low-skill manufacturing. That again, as you point out, needs energy.
Thank you, Marco, for introducing me to this book, which has quickly become one of my top reading priorities. The urgency, for me, is less about what you cover in your review — much of which, as you know, I agree with — and more about what is left out. One omission stands out: energy.
In a world where coal production and consumption are increasingly stigmatised, sometimes too hastily, India’s potential creates a binary situation: it can either make it, decisively, or break it, badly. Its demographic scale, English-speaking population, and strong education system all point to enormous promise. But in an increasingly energy-intensive world, the question of where India will source the energy needed to fulfil that promise is central.
India currently sources almost half of its total energy from coal, and around 30% from oil and natural gas. Even including nuclear, hydropower, solar, and wind, low-carbon sources remain a relatively small share of total energy supply. Coal is even more dominant in electricity generation, accounting for roughly three quarters of India’s power generation, compared with a lower share in China. If we follow Rajan and Lamba in comparing India’s trajectory with China’s, the energy numbers are not especially reassuring.
This matters even more if India intends to grow primarily through services — which would be a world first at this scale, and an impressive one. Services are not energy-free; digital infrastructure, data centres, transport, urbanisation, cooling, and reliable electricity all matter. A services-led model still requires a deep and resilient energy base.
Here is my caveat: I think the death of manufacturing as a leading force in economic development has been greatly exaggerated. The Modi administration seems to agree. Where Rajan and Lamba may differ, I suspect, is on the importance of initiatives such as the National Logistics Policy and PM GatiShakti. Their results have been less overwhelming than expected, partly because of weakening FDI inflows, but the strategic question remains: should India aim for steady growth through a healthier mix of sectors (and keep growing at 6%, which is the minimum to keep employment rate from falling), or should it push even harder into services while hoping that energy constraints, infrastructure gaps, and AI-driven disruption do not get in the way?
The latter seems like a long shot to me.
Thanks Luca, your point on energy fills a big gap in the book and in the discussion. I completely agree with you there. I also agree that 'the death of manufacturing has been greatly exaggerated.' It's part of the reason why I wish they had elaborated more in depth of how their strategy would work, and I think the key lies in the merging of manufacturing and services.
Some of the examples they mention in the book do include the actual manufacturing. The trick might be to go directly to higher value added manufacturing rather than starting with cheap, low-skill manufacturing. That again, as you point out, needs energy.