Paul Krugman says lack of jobs may hit India's rapid economic growth

Remigio Civitarese
Marzo 19, 2018

Krugman also highlighted that despite India making rapid progress on the economic front, the economic inequality in the country remained an issue.

Attributing factors that played a role in the economic "progress", Krugman said there was a dramatic change in India's policy including liberalised policies taken in early 1990s.

India's weakness in the manufacturing sector could work against it, as it doesn't have the jobs essential to sustain the projected growth in demography. India has become a much easier place to do business that it was.

But within the prospect of service globalisation also lay the possible pitfalls for the economy, Krugman said.

While attaching a news report of The Economic Times on Paul Krugman's take on Indian economy, Rahul Gandhi in a tweet said, "The Nobel prize winning economist, Paul Krugman, confirms what we've been saying for over two years now".

"You have to find jobs for people, " he emphasised.

Terming India's economic growth progress as "extraordinary", he said the country has become (on purchasing power) the world's largest economy overtaking Japan and while being behind the USA and China, it is far bigger than any European country.

Paul said that the subcontinent has become a better place to do business than it was before, although the bureaucratic hurdles have not gone away completely but reduced enormously. Globalisation of service trade has a huge potential.

"With western Europe, the US, South Korea, Japan and even China aging, this demographic potential offers India an unprecedented edge which could further contribute to the GDP growth rate", High Commissioner of India to Sri Lanka Taranjith Singh Sandhu had said. "In Asia, India could take the lead but only if it also develops its manufacturing sector, not only the services one". "The gap between India and world's big economies grew after independence. It has the first-mover's advantage here".

India's growth story though incredible never got the attention it deserved because China hogged the world's attention, Krugman said. "Countries across the world from Japan to Italy to China are suffering or are about to suffer from lack of manpower to propel their growth". "When such a plan is fulfilled you obviously will see a huge boost to your economy".

"India's growth story is quite unique".

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