Unemployment set to fall even without labour reforms: Montek

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New Delhi, Feb 20 (UNI) India's high economic growth, which has been clocking at close to 9 per cent in the past three years, is likely to generate more jobs in the coming years even in the absence of labour reforms, according to Planning Commission Deputy Chairman Montek Singh Ahluwalia.

This is due to the fast improving infrastructure and the realisation that the focus on higher education alone is not sufficient and there is need for equipping the existing labour with better skills through simple training programmes, Dr Ahluwalia said after releasing a book on globalisation and labour markets in India here last evening.

Expressing confidence that the country would sustain the growth rate at 9 per cent in the coming years, he said this, coupled with a better infrastructure and skill upgradation, would translate into higher job opportunities.

Liberalisation of labour laws would certainly give an additional boost to the job market, but a political consensus had to be arrived at on the subject, he said, hoping that there would be a better appreciation of this aspect over a period of time.

In China, 70 per cent of the wages were productivity-linked, whereas in India only about 20 per cent of wages fell under this category and this provided a competitive edge to Beijing, he explained.

Admitting that the number of formal employees, as shown by recent government data, had remained static despite the high GDP growth, he said this could be attributed to the fact that even the organised sector had started engaging ''informal employees.'' At the same time, unemployment was estimated at eight per cent, but the poverty level remained at 28 per cent. This showed that employment generation was not sufficient to reduce poverty levels as the real wages were decelerating, if not registering a negative growth.

This was a cause for concern as the country was turning out a large number of educated people who had high expectations from the booming economy, he said.

Further, the growing number of self-made billionaires also made big news headlines, resulting in social tension to some extent, he said.

However, it was heartening that India did not have to go through any painful restructuring in order to promote growth, he pointed out.

The book titled ''Globalization, Labour Markets and Inequality in India'' is authored by Dr Dipak Mazumdar and Dr Sandip Sarkar and published by Routledge in association with Canada's International Development Research Centre (IDRC).

Dr Mazumdar is Senior Research Associate, Munk Centre for International Studies at the University of Toronto, Canada, and Visiting Professor, Institute for Human Development, New Delhi . Dr Sarkar is currently working as a Fellow with the Institute for Human Development (IHD), New Delhi.

The panelists at the function included Cambridge University Professor Ajit Singh, Jawaharlal Nehru University emeritus Prof Ashok Mathur, Dr Rizwanul Islam from International Labour Organization, and Dr Stephen McGurk from IDRC.

Dr Ahluwalia praised the authors for their deep understanding of the subject and their thorough explication of difficult material.

Poverty in India was falling but slower than expected given the country's astounding growth. Inequality was a growing problem though the actual level in India was less than that of China, he said.

UNI SN RP AS1506

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