Economists Seek Stimulus For Nation Working Poor - Dec 10, 2008

To tide over the slowdown a stimulus package for the country''s labour force should be top priority, as it would boost demand among the nation''s largest consumers, leading economists say. Highlighting a steep inequality in the pay hikes of executives and the labour force during the economic boom, Raymond Torres, director at the ILO''s International Institute of Labour Studies in Geneva, pointed out that worldwide the average hike in executive pay was 10 per cent as compared to a mere 0.7 per cent for workers. Predicting a global slowdown in the Indian economy in coming years, Torres said the government''s efforts to stimulate the economy would be of no use if low-income groups and ongoing infrastructure projects in the country do not receive a timely booster.

In India the taxation system is progressive. Keeping more reliance on income tax levels rather than on indirect tax will also boosts demand in the economy to tide over a recessionary trend, he added. Rajya Sabha MP and National Commission for Enterprise in the Unorganized Sector (NCEUS) Chairman Arjun Sengupta told, we have already submitted a report to the Prime Minister for taking measures for protection of the unorganized sector amidst this global slowdown. A suggestion is to provide a Rs 10,000 crore loan package to this segment under the priority sector policy of all scheduled banks to avoid job cuts in the unorganised sector, which employs more than 92 per cent of the workforce and contributes 50 per cent to the nation''s GDP.