Jobs, jobs and more jobs is the mantra of the new dispensation. After years of job losses, courtesy high interest rates, poor off take in export markets and a slowing economy, the Economic Survey tries to pick up the pieces by arguing, "The ultimate goal of economic policy is to create a sustained renaissance of high growth in which hundreds of millions of good quality jobs are created. Good quality jobs are created by high productivity firms, so this agenda is critically about how firms are created, how firms grow and how firms achieve high productivity."
Cutting directly to the chase, it hints at how labour laws constrict productivity. The survey suggests, "Labour laws create strong incentives for firms to avoid hiring a large number of low skill workers. An array of problems holds back the entry and maturation of new firms."
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This vicious cycle has blindsided Indian industry and resulted in joblessness. The inflexible labour laws having protected existing businesses, even if inefficient, limiting entry of competition.
A slew of reforms will kick in with a lag, according to the survey, "Hence we may envision a five-year period within which reforms are put in place, followed by a period within which the economy will fully absorb the new environment and achieve a higher trend of growth."
That India's fiscal situation is worse than it appears is now a given, it is imperative for the new government to take tough measures to shore up public finances and reduce inflation.
Many economists believe the last government's accounting understated the size of the deficit, and Jaitley will need to present a credible recovery plan to keep the ratings agencies onside.
"The Economic Survey shows the gravity of the economic situation that needs correction," Jaitley told reporters after ceremonially placing the report on a table in Parliament.
The priority of the new government, the survey said, should be to revive business sentiments "that could be at the heart of restarting the investment cycle".