Creation of more jobs, reasonably high wages for same type of work and innovations can lead to inclusive growth in the country, said Nobel Laureate Edmund Phelps on Monday.
Addressing Bharat Ram Memorial Seminar, organised by Sri Ram Centre for Industrial Relations and Human Resources and the Federation of Indian Chambers of Commerce and Industry, Phelps proposed that the government should render fiscal incentives, support or subsidy to corporate house for creation of more and more jobs with high wages. ?High wages enable workers to solve various problems, participate in the growing economy and live with dignity,? he said. He said jobs, particularly for the disadvantaged and poor, could lead to distributive justice.
?The way the market economy determines wage, it creates problems of inclusion. The government should step in to regulate, if necessary. There should be a vibrant labour market for equalising wage rate for same type of work.?
When pointed out that high wages may lead to price inflationary trend in the economy, he said, ?It is the duty of the central bank of the country to take care of such situation.? Phelps stressed upon innovation as another necessary aspect for economic growth to be sustainable and dynamic. Jobs and innovations added to the capability of workers and lead to dynamism in the economy and this ultimately would lead to inclusive growth, he said.
He said that indigenous innovation can achieve more dynamism in the economy.
The professor emeritus of the London School of Economics, Lord Meghnad Desai said, ?In India the entire distribution pattern is of social nature due to political considerations. It is similar to the civil rights movements of yesteryears in the US. This should be given up and the distribution pattern needs to be changed. Government should encourage low-technology labour-intensive industries.?