Addressing the Bharat Ram Memorial Seminar organized by Sri Ram Centre for Industrial Relations and Human Resources and the Federation of Indian Chambers of Commerce and Industry on Monday 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 that jobs, particularly for the disadvantaged and poor can 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 equalizing 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."
The Union minister for Panchayati Raj Institutions and northeast development, Mani Shankar Aiyer, however, batted for political economy and said that democratic actions dictate economic policies in the country as India after Independence began with a full fledged democracy, unlike many countries in the West which took years to give democratic rights to all sections of its people. He pleaded for grassroots local village democracies and planning from the village level.
The chairman, Social Work Research Centre, Sanjit Bunker Roy said: "It was been demonstrated that people without formal education, particularly women have become self-reliant and productive with the help of local technologies. We have successfully set up in different parts of the country Barefoot Colleges quite different from formal education system to disseminate and practice the traditional ways of life."