Business Standard

Creating jobs: Remove roadblocks to investment and labour market efficiency

In the four years 2012-13 through 2015-16, growth in real investments dropped sharply to 1.5% a year. Correspondingly, growth in employment dropped to 1.7%. Growth in GVA was below 1%

Jobs, Employment

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Mahesh Vyas
Conventional macro-economics tell us that if the government chooses to spur employment generation in the short-run, it needs an expansionary monetary policy and a profligate fiscal policy. Elevated inflation will have to be tolerated in such overindulgence. 

If the government abhors such a reckless policy, then it needs to wait for the business cycle to play out and let enterprise invest only when it finds it appropriate to do so. In the meanwhile, it may work towards removing impediments that deter private sector from investing aggressively and also remove those obstacles that do not allow labour markets to function efficiently. 
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Jul 30 2018 | 11:59 PM IST

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