India’s wages will rise if exports are increased, says report

According to a World Bank-ILO report, better jobs can be created in India by increasing exports.

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A World Bank report released in collaboration with the International Labour Organisation (ILO) recently reveals that wages in India can be increased and better jobs can be created if the exports are increased. Increase in exports will result in more employment for women as well as youth in the formal sector.

If exports are given a push, the average wages will also get a boost says the report titled ‘Exports to Jobs: Boosting the Gains from Trade in South Asia’.

The highly skilled workers in the urban areas will stand to gain the most from the wage rise. On the other hand, the workers with lower level of skills will find more formal job opportunities.

According to the research, increase in exports will make local labour markets perform better. Therefore, focus will have to be placed on increasing exports to South Asia, while at the same time making sure that the gains from higher exports are distributed better and across a wider base.

The report also reveals that India witnessed a growth rate of 7.2 per cent in 2017, which resulted in a reduction in the number of poor people. But the fact remains that regular jobs in the formal sector are still very few. Also, there is significant variance in the wages and quality of jobs from region to region, due to growing population. To add to that, trade also showed a reduction between 2012 and 2017.

Workers have not gained much directly because the country primarily exports chemicals, fabricated metals and other capital-intensive products. Therefore, there is a need to introduce appropriate policies that will increase exports and ensure that workers stand to benefit directly from trade. More exports will result in better wages and more formal jobs. But for this to happen, better polices are required so that each worker in the labour market enjoys benefits.

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