"They should say what the government should do so that employment increases at good wages," Panagariya said here at the 18th JRD Tata Memorial Lecture. "Where is the passion for hiring workers in the industry here?.. you need to lobby to the government to bring more employment," he asserted.

He admitted that (the industry) has talked a lot about the rigidities in labour laws. The industry has been pushing for relaxing the labour law framework to boost ease of doing business in the country. The government, in turn, has taken a host of initiatives to amend labour laws, but all have run into stiff opposition from trade unions.

Trade unions have called for a nation-wide strike on September 2 and are expecting 40 crore workers from organised and unorganised sectors to join the call. "What are those conditions (for creating more jobs) only entrepreneurs can tell. What is keeping them from employing more workers?" Panagariya wondered.

Expressing concern over the industry promoting more capital-intensive businesses, he said, "I fear that entrepreneurs will simply look the other way, hire more and more machinery and go into capital-intensive industry. Even within the industry they operate, they choose most capital intensive one. That is ultimately not good from the employment perspective."

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