Lok Sabha Question No. 2026 (UNSTARRED), answered on 2017-12-29
Subject: GDP and Unemployment
Ministry: FINANCE
Asked by: TARIQ ANWAR

Government of India Ministry of Finance Department of Economic Affairs

## LOK SABHA UNSTARRED QUESTION NO. 2026

TO BE ANSWERED ON DECEMBER 29, 2017

## GDP AND UNEMPLOYMENT

## † 2026. SHRI TARIQ ANWAR:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware that reduction in the level of Gross Domestic Product (GDP) tantamounts to unemployment in the country, if so, the details thereof and the reasons therefor;
- (b) whether the Government proposes to take steps/measures to prevent unemployment and maintain high GDP growth; and
- (c) if so, the details thereof?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PON RADHAKRISHNAN)

(a) The level of Gross Domestic Product (GDP) cannot be directly related to the level of employment or unemployment in the country, as the level of GDP of a country depends on a number of factors including deployment of labour and capital, structural,  external,  fiscal  &  monetary  factors,  improvements in the quality  of institutions, infrastructure, entrepreneurial abilities and the resulting improvements in productivity. GDP at constant (2011-12) prices increased from Rs.11381002 crore in 2015-16 to Rs.12189854 crore in 2016-17.

(b) & (c) Government has undertaken several measures for generating employment in the economy, inter-alia, including, strategic  promotion  of  labour-intensive  manufacturing  sectors  like  textiles  and  expanding  employment  opportunities  by promoting  tourism  and  agro-based  industries.  Government  has  implemented  National  Career  Service  portal  for  online registration and posting of jobs for job-seekers and providing other employment related services. During 2016-17, a new Scheme  'Pradhan  Mantri  Rojgar  Protsahan  Yojana'  has  been  initiated  by  the  Government  with  an  incentive  of reimbursement of the 8.33%  Employee Pension  Scheme (EPS) contribution made by the employer in respect of new employment. In order to improve the employability and to create decent jobs for youth of the country,  the Government imparts  short  term  skill  training  through  Pradhan  Mantri  Kaushal  Vikas  Yojana  and  long  term  training  largely  through Industrial  Training  Institutes.  In  addition  to  these  measures,  Government  has  increased  budgetary  allocations  for employment  generation  schemes  including  Mahatma  Gandhi  National  Rural  Employment  Guarantee Act,  Deendayal Antyodaya Yojana-National Rural and Urban Livelihoods Mission, Skill India, Make in India, Micro Units Development and Refinance Agency Ltd. (MUDRA), etc. to promote employment generation directly or indirectly.

The Government of India has taken various initiatives to boost the growth of the economy which, inter-alia, include; fillip to manufacturing,  concrete  measures  for  transport  and  power  sectors  as  well  as  other  urban  and  rural  infrastructure, comprehensive reforms in the foreign direct investment policy and special package for textile industry. Government had also announced various measures in the budget 2017-18 to promote growth in the economy which, among others, include push  to  infrastructure  development  by  giving  infrastructure  status  to  affordable  housing,  higher  allocation  to  highway construction,  and  focus  on  coastal  connectivity.  For  highways  development  the  Bharatmala  Pariyojana  has  been launched. The government has launched a phased program for bank recapitalization. This entails infusion of capital to the public sector banks, which is expected to encourage banks to enhance lending. The Insolvency and Bankruptcy Code was enacted to achieve insolvency resolution in a time bound manner. To implement the Code, the National Company Law  Tribunal  was  established.  The  other  growth  promotion  measures  include:  lower  income  tax  for  companies  with annual turnover up to Rs 50 crore; further measures to improve the ease of doing business; and, a major push to digital economy. The introduction of the Goods and Services Tax (GST) has provided a significant opportunity to improve growth momentum by reducing barriers to trade, business and related economic activities.