Rigid Labor Laws: a Minor Barrier to Growth?
“Removing the main barriers to growth would free India’s economy to grow as fast as China’s, at 10% a year.” This is the central conclusion of a recent report entitled “Achieving India’s Economic Growth Imperative” by the McKinsey Global Institute. Economic Times, September 26 2001 “Removing the main barriers to growth would free India’s economy to grow as fast as China’s, at 10% a year.” This is the central conclusion of a recent report entitled “Achieving India’s Economic Growth Imperative” by the McKinsey Global Institute. The conclusion itself is not exceptional since many others, including the present author (Economic Times, January 12, 2000), have argued for some time that a double-digit growth is well within India’s grasp. Indeed, Prime Minister Atal Bihari Vajpayee himself has mentioned 9 percent annual growth as necessary to double the country’s per-capita income in the next ten years. What is exceptional about the report is the set of reforms it regards crucial to attaining the 10 percent growth rate and, even more importantly, the reforms it regards as not so crucial. The report identifies three…
Continue reading...