9/12/2019

Time to give up on India (economically)?

"India’s obsession with GDP is a more durable problem. GDP is merely correlated with vital outcomes such as employment and wealth; it should not be the performance benchmark. Five percent GDP growth would be adequate if household incomes outpace it, and if it is labor-intensive. We can’t tell because joblessness has never been properly measured. No one in Delhi has wanted to know.

This has become a crippling failure; the principal reason to expect a decade or more of fast growth is the surge of India’s working-age population. The primary goal of policy should thus be gainful and productive opportunities for potential labor market entrants. However, decision makers don’t even see the true state of the labor market, much less make policy on this basis."