The global economic condition is still bleak, and according to most researchers the recovery is not going to happen any time soon.
In this backdrop, appropriate domestic policies to develop the large domestic market and stimulate domestic growth would help offset the negative forces emanating from the global economy, said Subir Gokarn, Deputy Governor, Reserve Bank of India.
Gokarn said this while delivering the 33rd Frank Moraes Memorial Lecture on ‘Driving the economy in an era of global recovery: Unleashing growth strategies for sustainable development’, under the auspices of the United Writers’ Association, here today.
Highlighting the importance of the right macro economic environment for rapid growth, he said development of infrastructure is a key factor for this. Lack of infrastructure would impact investment, which in turn affects job creation and overall growth.
As the country’s demographic profile is better than China’s, it should be exploited to its fullest potential. In India workers are not adequately skilled. And secondly, there is a need to generate high productivity jobs to offer this workforce some kind of employment. The challenge is to generate more jobs for that population, said Gokarn.
In India, there is no uniform infrastructure development across sectors. He cited the telecom sector as an example saying it received sufficient investment which resulted in some meaningful increases in availability and services. He said there are several other sectors where there is a need to develop viable business models to ensure necessary investments and thereby development.
Inflation, particularly food inflation, was because of demand and supply gap, he said. It can only be arrested by addressing the issues in productivity growth.
On generating jobs, he said, unless top priority is accorded to build necessary infrastructure, flow of investment will be hampered, which will result in poor job creation.