Easier to do business in India, jobs a worry: Nobel Laureate Paul Krugman

Nobel Laureate Paul Krugman on Saturday said India’s growth story could be derailed by a lack of jobs. While praising the country’s growth and improvement to the business climate, he said unemployment, inequality, corruption, and infrastructure bottlenecks still needed to be addressed.

“Lack of manufacturing could be a major hurdle as India doesn’t have the jobs,” he said.

The economist said India had made rapid progress but economic inequality in the country remained elusive.

He also said creation of employment was of utmost important to sustain the projected growth in demography and the lack of manufacturing could prove to be a hurdle. He also did not mince words about India’s corruption, which he compared to neighbouring China.

“You cannot become Denmark with Chinese levels of corruption,” he said. 

India’s rank improved to 100 in the World Bank ease of doing business rankings in 2017, against 130 in 2016. Prime Minister Narendra Modi, too, had emphasised this earlier. 

“The PM said India moved to 100 in the rankings. That is not a badge of distinction, but it is better than it was,” Krugman said.

He added that India’s policies had opened up possibilities of doing business. “There has been a real transformation.”

“I am on the Centre-Left, but I do not think the government should have a heavy hand on the economy. India used to have Licence Raj, where bureaucratic obstacles were immense. That has not gone away completely but has been enormously reduced,” he said.