Jobs and agrarian distress in India cannot be solved unless the economic growth rate is high, Montek Singh Ahluwalia, former Deputy Chairman of the erstwhile Planning Commission, said.

“The crux of the agrarian crisis is that prices have collapsed and it is said that minimum support price (MSP) is a solution. But, if the market demand does not support it, I am not sure if an MSP will solve the problem,” he said, speaking on the topic “India’s growth prospects for the next decade”.

The event was organised by The Triplicane Cultural Academy and The Kasturi Srinivasan Library.

Mr. Ahluwalia said if there is much higher growth, there won’t be a problem of farm income going down. In the first 6-7 years of the the UPA Government, that is exactly what happened... when the real wages went up and there was no crisis, he said.

Non-agriculture jobs

“If growth was there, people would have gone out of agriculture to take up non-agriculture jobs. Therefore, rural distress is not going to be solved by keeping the present number of people in agriculture and making their income go up. It’s going to be solved if you run the economy in a way which absorbs them away from agriculture into better earning jobs. That way, existing agriculture population would be better off,” he said.

On jobs, he said that technology is changing rapidly and also making existing jobs disappear.

“TheTechnology changes would create new jobs. But the economy should be prepared in such a way that those new jobs are created in large numbers,”he Mr.Ahluwalia said.

He said if economy is managed well, India can grow at 7.5%.

In his address, C. Rangarajan, former Chairman of the Prime Minister’s Economic Advisory Council, said that investment rate and health of the financial sector, among others, should be improved for achieving higher economic growth.

He said the economy had the potential to achieve 9% growth.