Automotive slump & industrial policy

The sector is needed as a growth engine and a risk of collapse needs to be averted

Mention “industrial policy” and there are strong reactions: An angry buzz from free-market enthusiasts, or approval from the diminishing ranks of believers in government intervention. But as economist Dani Rodrik observed over a decade ago, reality has not been kind to either set — neither the belief that the way forward (for developing economies) is through strong government interventions, nor the belief that it is best for the government to stay entirely away from the economy. Although there were successes sometimes with import substitution, planning, and state ownership (a case in point is Indian Space Research Organisation), these practices were