Services before chips.

"For more than half a century, the handbook for how developing countries can grow rich hasn't changed much: Move subsistence farmers into manufacturing jobs, and then sell what they produce to the rest of the world." "Today, manufacturing accounts for a smaller share of the world's output, and China already does more than one-third of it." "Factories today tend to rely more on automated technology and less on cheap workers who have little training." "One alternative might be found in Bengaluru, a high-tech center in the Indian state of Karnataka." "Such centers are expected to generate 500,000 jobs nationwide in the next two to three years, according to the consulting firm Deloitte." yahoo. This was advised by Prof Raghuram Rajan who said to "focus on high value-added services instead of manufacturing to productively harness the country's demographic dividend and propel the country into 'Amrit Kaal' because if India does not grow, it would grow older demographically before it gets richer." TOI. Rajan "has batted for a services-led export model for India instead of following China's manufacturing-led one in order to grow faster." Also, "Since many of these services are weightless they have low climate impact benefiting the efforts to mitigate climate change." ET. Rajan cautions against subsidies for manufacturing chips. "The reality is that chip subsidies are capital subsidies, which are meant to be paid up front," and "only the naive will think the subsidies will stop here. What we will get, if all goes well, is 28 nm chips. The state of the art in modern cell phones is 3 nm." BT. Enraged patriotic 'experts' called him a "parachute economist", meaning an ignorant foreigner who drops in to pontificate without proper knowledge. News 18.  "The last-quarter spurt would see India's merchandise exports to be around $445 billion in the financial years 2023-24, about 1.3% lower than the previous year's level of $451 billion." "Services exports are up 6.7% on year till February to $314.8 billion. They are expected to end the year at around $345 billion." FE. "If India wants to build a robust computer and electronic manufacturing industry, it needs to shift focus, fast." "That would mean recognizing that Vietnam, not China, is its biggest rival." "But India stands out among peers in implementing higher import taxes, which motivate companies to set up in the country to supply local consumers, but also makes them less competitive in the export market," wrote Tim Culpan. As a result of these policies, "In India, higher educated young people are more likely to be unemployed than those without any schooling, according to the International Labor Organization." TOI. Manufacturing is not creating enough jobs because the rural safety net, "MGNREGS has generated 40 crore person-days of work, more than the pre-pandemic (2019-20) level - suggesting a continuing rural distress, and that job opportunities in the cities may not have returned to normal." TOI. We already have a start in services. We might lose that if we concentrate on manufacturing. Then, we had our chips.