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On February 19, 2008, Dr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, Government of India, released Globalization, Labour Markets and Inequality in India by Drs Dipak Mazumdar and Sandip Sarkar, published by Routledge in association with IDRC, comprising the findings of the IDRC supported research. At the launch at the India International Centre in New Delhi, a number of distinguished panelists, including Cambridge University Professor Ajit Singh, Jawaharlal Nehru University emeritus Prof Ashok Mathur, Dr Rizwanul Islam, International Labour Organization, and Dr Stephen McGurk from IDRC, joined Dr Ahluwalia to speak of the rigor and policy relevance of the research findings.

In his remarks, Dr Ahluwalia praised the authors for their deep understanding of the subject and their thorough explication of difficult material. Poverty in India is falling but slower than expected given India’s astounding growth. Inequality is a growing problem that demands better understanding but it is also a perceptual issue, fed by media images of better lives we all would love to live. The actual level of inequality in India is less than that of China! Employment generation outside very unproductive agriculture has been far too slow. The number of formal employees in the organised sectors has remained stationery while informal employment has shrunk and more formal jobs now seem like informal employment. This is disturbing as the India’s tremendous growth and production of highly educated people is creating huge expectations. Labour reforms are important (in China, 70% of the wages are productivity-linked, whereas in India 70-80% of wages are not), but equally important are transformations in infrastructure, to get goods in to be transformed by basic manufacturing and then to get them out to customers, and a re-focus on the basic skills needed for manufacturing and services. There is a consensus about these infrastructure and training needs but there needs to be a greater appreciation for the necessary productivity changes. China has focused on improving skills by a simple notch or two allowing massive sectoral shifts and productivity gains for large numbers of people. By contrast, India has focused on higher education. This has created an acute skill shortage in India in a host of critical sectors like construction, where Indian contractors are so desperate, they are combing Indian migrant worker communities in the Gulf to persuade them to return to India!

For more information on the book

2008-02-26

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