India and China Will Drive Global Growth: Chidambaram

He said that while advanced industrial economies have adapted by creating new jobs and endowing their workers with the skills to do those jobs, the pace with which the East has grown has reduced the time companies and workers in industrial countries have had to adapt.

The high levels of persistent unemployment in industrial countries may partly reflect the lack of such adaptation, he said.

"This is creating new problems....How will advanced industrial countries find people for the jobs that are vacated by retiring workers if their fertility rates fall below the replacement rate? The answers will determine the character of such societies in the years to come," the finance minister said.

"The wrong answer is to blame immigration, trade or technological progress. The right answer will be to harness these forces to provide the remedies," he added.

Alluding to the recent financial crisis, Chidambaram said it could be seen as evidence that the imbalances that were building up were unsustainable.

Noting that emerging markets have not been immune to the economic slowdown, he said slowdown in industrial countries has affected India, especially its exports.

Unlike other emerging markets, India has been a net importer of goods and capital and it too has become more open over this period? The sum of Indian goods and services traded exceeded 55 per cent of GDP in 2011-12.

Chidambaram further said that India stands to gain from its huge demographic dividend.

As India's share of the working age population continues to rise, nearly one-half the additions to the Indian labour force over the period 2011-30 will be in the age group 30-49.

The share of this age group is slated to decline in advanced countries and this would result in greater production, savings and investment in India as the country reaps its demographic dividend, he said.

Also Read:
Rupee Trims Initial Gains Vs Dollar, Still Up By 2 Paise
India's Industrial Output Rises 0.6 Percent in February