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Preface

Published online by Cambridge University Press:  08 February 2018

Pravakar Sahoo
Affiliation:
Institute of Economic Growth (IEG), New Delhi
Pradeep Agrawal
Affiliation:
Institute of Economic Growth, Delhi
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Summary

India, one of the top five economies worldwide, is a young country. It has more than 65 per cent of its 1.3 billion population below 35 years of age. To realise the potential of this demographic dividend, the Indian economy must provide facilities for education, health and skill development to the population, especially the large sections of society that are poor, or who have fewer amenities. But India is a home to 18 per cent of the world's population and 30 per cent of it is poor – who live on less than $2 a day. Agriculture contributes only 14 per cent to the GDP, but employs more than 50 per cent of the population. There is much disguised unemployment, under-employment and inequality in the Indian economy. Reducing poverty and inequality is a massive challenge for policymakers and it requires a multi-pronged approach. First, the government must make enough investment in education, health, sanitation, and other physical and social infrastructure to improve the standard of living for a billion people. This requires resources from the exchequer. Second, the government must enable people to shift to the secondary and tertiary sectors from agriculture, where marginal productivity of labour is low or negligible, after creating a productive labour force through good education, skill development, training, and healthcare facilities. This requires improvement of investment ratios across sectors, particularly in manufacturing, for productivity-led growth and job creation. Third and the most important, it must create opportunities for the existing unemployed and under-employed and for the new labour force. Job creation must be the government's top priority. A million people join the workforce every month; in 2015, a dismal 1,35,000 jobs were created, according to the Employment Labour Bureau. Achieving and sustaining high growth and creating employment is an urgent necessity.

In the early 1990s, economic reforms began in India. Then predominantly agricultural, the economy is now service-led. But given the strong industry-service linkage, the service sector – which is not labour-intensive – cannot sustain itself without a vibrant, growing industrial sector or grow by depending only on the world market. Moreover, one cannot depend on agriculture, as half the labour force does, to improve the standard of living. To remain on a high-growth trajectory, there must be an increase in investment in industry and, in particular, manufacturing, which generates jobs for millions of semi-skilled, literate labourers.

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Publisher: Cambridge University Press
Print publication year: 2017

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  • Preface
  • Edited by Pradeep Agrawal, Institute of Economic Growth, Delhi
  • Book: Sustaining High Growth in India
  • Online publication: 08 February 2018
  • Chapter DOI: https://doi.org/10.1017/9781316855584.001
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  • Preface
  • Edited by Pradeep Agrawal, Institute of Economic Growth, Delhi
  • Book: Sustaining High Growth in India
  • Online publication: 08 February 2018
  • Chapter DOI: https://doi.org/10.1017/9781316855584.001
Available formats
×

Send book to Google Drive

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive.

  • Preface
  • Edited by Pradeep Agrawal, Institute of Economic Growth, Delhi
  • Book: Sustaining High Growth in India
  • Online publication: 08 February 2018
  • Chapter DOI: https://doi.org/10.1017/9781316855584.001
Available formats
×