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India's Modi seen appeasing voters, putting reforms aside in pre-election budget

Ersin Çelik
09:54 - 28/01/2019 Monday
Update: 09:56 - 28/01/2019 Monday
REUTERS
Indian PM Modi
Indian PM Modi

LOOKING FOR JOBS

Though he has spent big on building roads and railways, Modi has been fiscally conservative for most of his time in power, helping to bring retail inflation to near 2 percent from double-digits during the previous government's time.

Last month's state election upsets have made the Modi government shed some of that caution.

Despite expanding by 7 percent plus annually - the fastest pace among major economies, the uneven nature of the growth has meant that the economy has failed to create enough jobs for millions of youth entering the workforce each year.

Merchandise exports have shown no signs of growth in last four years, and some textile, leather and engineering goods producers have shifted production abroad.

Earlier this month, the Centre for Monitoring Indian Economy (CMIE), a leading independent think tank, issued a report showing the country lost as many as 11 million jobs last year, making it even harder for new entrants to the labour market.

Last week, Raghuram Rajan, former governor of the Reserve Bank of India, said India needed flexible labour and land laws, and to fix glitches in the Goods and Services Tax, launched as a major tax reform in 2017.

"We need two percentage points more growth to provide those jobs that are needed," said Rajan.

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5 years ago