Pitching for labour reforms, the chairman of the 16th Finance Commission and former NITI Aayog vice-chairman Arvind Panagariya on Saturday said “unemployment” is not a problem for India but “under-employment” is.
Speaking at a session ‘The Economic Whisper: how to fuel growth with jobs’ at the concluding day of the two-day ABP Network’s ‘Ideas of India Summit 3.0’ here, he also sounded optimistic that the jobs problem in the country will be solved over the next 10 years.
“Unemployment is really not India’s problem in my view. Our problem is underemployment, so productivity is low. The job that can be done by one person often gets done by two people or maybe three. And that is where I think, the real challenge of jobs is creating well-paid high-productivity jobs,” he said.
Stating that in the economy’s jargon, India is a labour-abundant and capital-scarce country, he said, “What we have done is to put much of the capital in very selective sectors which are in any case very capital intensive.”
“We got a situation where much of the capital is working with very few workers. And then you have a host of workers in agriculture in micro and small enterprises where the capital is hardly present. So then you got a lot of workers working with very little capital. And when that is the case, it translates into low productivity,” Panagariya said.
The country still needs to fix labour and trade laws, he said, adding that, “compared to other countries, protection level is higher, which needs to come down.”
“In India, building consensus is a part of the democratic reform process, which makes passing laws a slower process,” he said.
PTI