The Hindu Business Line : World Bank studying employment scenario in India

THE World Bank has taken up a comprehensive employment study of India as a whole under which it will closely look at the regulatory issues, which have a bearing on labour reforms.

Making a presentation on `Growth with equity: Building on West Bengal's Progress', at an interactive session organised by the Indian Chamber of Commerce here on Friday , Dr Sadiq Ahmed, Sector Director, World Bank, said there has to be a fine balance between the need to protect the workers' rights and providing labour flexibility which was the key to productivity.

Pointing out that all these aspects would be looked at in the proposed employment study, he said at the end of the day, if investment has to come in for the manufacturing sector to grow, then the labour situation should not be such as to make it impossible for business to operate.

On the investment scenario in China compared with the Indian set-up, he said China had fewer regulatory bottlenecks.

Rooting for investment as a major driver of economic growth in West Bengal, he dwelt at length on the three key aspects of promoting private investment in exports and manufacturing sector (the investment climate challenge), enhancing public investment in infrastructure and human development (the fiscal challenge) and delivery of social services (the human development challenge).

Describing Bengal as the fastest growing (nearly 7 per cent) among States over the 90s, second only to Karnataka, and followed by Gujarat and Tamil Nadu, he said the services sector, which has grown by more than 9 per cent annually during the 90s, was the main driver of growth.

Labelling agriculture as a star performer for Bengal, Dr Ahmed said the industry, on the other hand, has been a big disappointment. Though it has shown some recovery in recent years, it still remains sluggish. He felt new investments are needed in registered manufacturing to prop up growth, especially in the export-oriented sector. Describing the growth challenge as the prime factor for sustaining the development momentum in the State, he cautioned that growth in agriculture, however impressive, has now settled down to a low level plateau, and there was an urgent need for fresh impetus.

Advocating better connectivity with rural and non-farm sectors, he said manufacturing growth focused on export markets has to pick up to maintain overall rapid growth and employment.

Dr Ahmed said that as per a World Bank study, in which managers were asked to rank specified investment climate issues as growth bottlenecks, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh were found to possess a better investment climate than West Bengal. He identified land availability and access to finance as two major constraints in Bengal.

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