India’s labour conundrum

Does India suffer from a labour shortage? That would seem to be a strange question, given the widespread perception of large-scale unemployment and under-employment in the country and reports of job losses in sectors such as textiles. But here’s what the Reserve Bank of India said in its recent monetary policy statement: “An important driver of inflation is the upsurge in both rural and urban wages, which is exerting cost-push pressures.”

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