Financial and business magazine Forbes has warned that India faced the risk of jobless growth, saying its booming services sector was too small to provide employment for the burgeoning work force.
"It is the energy and manufacturing industries that will have to be the engines of job growth, as IT services companies are just too small," the magazine said announcing its 40 largest corporations of India.
India faced a risk of jobless growth if the economy could not grow fast enough to generate jobs for a labour force that is getting more productive and growing in size by 4 per cent a year.
"The resultant growth of manufacturing and services sectors is driving the overall expansion of the economy, with gross domestic product growth for this year forecast to be eight per cent -- though as always in still overwhelmingly rural India, a bad monsoon season can knock a couple of percentage points off the outcome," it said.
Forbes said the growing budget deficit was likely to rein in government spending, which helped boost growth of 9.3 per cent in the first quarter.
"That could be exacerbated if the 117 special export zones hollow out the country's tax revenue as big companies move in domestic-production operations to take advantage of tax exemptions," it said.
The magazine also reiterated the pitfalls of red tape, saying that the greater danger is that the will to reform the economy gets weaker the further down the bureaucracy one gets from central government.
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