Despite a global economic slowdown, the latest data show that India is projected to grow at a faster rate than most emerging economies. In a piece for Mint, Dr Niranjan Rajadhyaksha, Executive Director, Artha Global, opines that this potential growth can be increased further by at least 1 percentage point.
Excerpts below:
“Economic output is still below where it would have been in case there had been no pandemic—a gap of around $350 billion. Think of this as a permanent output loss. Millions who left the labour force have not yet rejoined it. The labour force participation ratio is still below its level before the pandemic. Despite such lingering pain, India managed to negotiate the storm better than most countries.”
“The sources of Indian growth are worrisome. Of the 7% growth rate, four percentage points are accounted for by productivity growth, two percentage points come from investment activity, and only one percentage point from growth of the labour force. […] The contribution of labour to economic growth should be higher, given India’s bulge in the working-age population, aka the demographic dividend.”
Read the full article here.
