India has the least number of workers protected under law in the world even as the country’s labour market has too much regulations, Raghuram Rajan, Chief Economic Adviser in the Finance Ministry, said on Friday.
“India’s labour market is over regulated ... One of the feature of Indian labour market is that it gets strongest protection under law,” Mr. Rajan said while addressing the India Today Conclave here.
“We have too much regulations, we have too many regulations at wrong time, sometimes little less regulations at the right time. We need to figure out what we need and pick out what we don’t need,” he added.
Labour reforms have been pending in India for long. Amendments to various labour laws have been awaiting Parliamentary approval. Rajan also emphasised careful implementation of the government’s welfare programmes.
“The government’s subsidies have to be carefully targeted, and subsidy programmes have to be efficient, we as poor country, cannot afford poorly targeted or inefficient welfare programme,” he said.
On growth and equity, Mr. Rajan said, “We currently have programmes like food, education health and pensions but the key question is how much should we do, who should be target.”
Mr. Rajan, a former chief economist of IMF, predicted that welfare state in Europe and the U.S. is unsustainable.
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