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State of growth: Where are jobs?

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Published: January 26, 2019 12:22:43 AM

Inflation, however, fell across states from the levels five years ago, though the inter-state inflation figures show wide difference, with Kerala having the highest consumer inflation, at 6%, and Odisha having the lowest, at 2.2%.

Growth has also not translated into job creation—11 of the 17 non-special category states recorded lower job growth than the national average in ?employment-intensive? sectors like manufacturing, construction and trade.

Twelve of the 17 non-special states have managed to buck the trend of slowdown afflicting the national GDP, registering faster growth in FY18 compared to the the five previous years. But, growth hasn’t been equitable, a CRISIL analysis notes, given low-income states have not been able to sustain the momentum to meaningfully bridge the per capita income gap with high-income ones. In fact, the gap has widened. Growth has also not translated into job creation—11 of the 17 non-special category states recorded lower job growth than the national average in ’employment-intensive’ sectors like manufacturing, construction and trade.

Inflation, however, fell across states from the levels five years ago, though the inter-state inflation figures show wide difference, with Kerala having the highest consumer inflation, at 6%, and Odisha having the lowest, at 2.2%. While states have been increasing their share in capex spends vis-a-vis the Centre, and thereby have become the engines of government spending, this has come at the cost of most veering off the FRBM target. Debt-GDP ratio is up in many states, thanks to the assimilation of UDAY, fam loan waivers, and pay hikes for government servants. Despite this, most states are still not spending enough on health, irrigation and education, areas where spending can help develop the quality of human capital.

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