The government should bring in policies that promote labour-intensive manufacturing in order to generate and sustain double-digit growth in national income, Arvind Panagariya, Professor of Economics and Jagdish Bhagwati Professor of Indian Political Economy at Columbia University, said at a CII seminar here on Thursday.
He said while China has done a great deal in promoting labour-intensive industry, India has lagged behind on that front. Promoting the labour-intensive industry can have a big multiplier effect on the entire economy, he said, adding that India should exploit its competitive advantage of having huge labour force. ?
While appreciating the growth that the IT and software industry has witnessed recently, he said these capital-intensive sectors can generate limited employment.
India needs to focus on developing labour-intensive industries, such as steel, coal and cement, to fasten the rate of growth, he said. Panagariya, whose book India: An Emerging Giant is being published in December 2007, said that at this point the country should not bother too much about inequalities as it can take the focus away from reforms.
?When we focus on inequality, we go after guys who actually create wealth?thereby hampering the overall growth,? he said.
?We should focus on poverty alleviation and not too much on inequalities,? he added. Putting forth a case for hastening reforms, he said growth has been ultimately linked to reforms.