Economist Panagariya hopes for India’s double digit growth

July 21: India can achieve the double-digit growth in forthcoming years and can also sustain it if the manpower of India switches from agriculture to industry, according to the analysis of eminent economistArvind Panagariya. He was addressing a corporate seminar at CII hall in New Delhi.

As India is an agricultural country, 60 percent of manpower is involved in agriculture and the growth rate of this sector is only 2.2 percent while India’s GDP growth rate is above 8.5. If a portion of some manpower switches from agro sector to industrial and educational sector, India can achieve the magical double digit growth rate very soon and also be able to sustain it for a long time, experts believes.

"Achieving double digit growth is possible provided labour and education reforms are undertaken and infrastructure is improved", said Pangaria.

“The continued stress of the Planning Commission on developing agriculture sector will not add much to the Gross Domestic Product (GDP) of the country” added Panagaria, the economics professor at Columbia University.

Earlier, Indian Finance Minister P. Chidambaram assumed that India could cross the 10 percent growth in the next financial year just 10 days before.

"Labour market inflexibility is the basic reason behind the slow down of agriculture sector. There is much scope of earnings in industrial sectors rather than agriculture sector." he opined.

Panagariya mentioned the example of China that has much higher economic growth because of developing labour intensive techniques; while in India labour market is still rigid. The workers do not want to move towards the industries due to low labour cost.

Market inequality is also another reason of this lower development rate in the comparison of China’s growth. “The government is not following right path for bringing about equality in the society.”, said Arvind. Even though he warned the policy makers to avoid excessive focus on inequality.

"Excessive focus on inequality will only slow down policy reform measures. Implementing the policy of developing skills of work force is of utmost importance now," he quoted.