A stimulus package for the country's labour force should be top priority to tide over the slowdown, as it would boost demand among the nation's largest consumers, leading economists say.
Highlighting a steep disparity in the pay hikes of executives and the labour force during the economic boom, Raymond Torres, director at the ILO's International Institute of Labour Studies in Geneva, pointed out that worldwide the average hike in executive pay was 10 per cent as compared to a mere 0.7 per cent for workers.
Predicting a global slowdown in the Indian economy in coming years, Torres said the government's efforts to stimulate the economy would be of no use if low-income groups and ongoing infrastructure projects in the country do not receive 'a timely booster'.
"Supporting people with low income is a priority as they are the major consumers in this country. Ensuring more employment guarantee schemes or a hike in minimum wages would provide the requisite incentive to spur demand," said Torres.
"In India the taxation system is progressive. Keeping more reliance on income tax levels rather than on indirect tax will also boost demand in the economy to tide over a recessionary trend," he added.
Rajya Sabha MP and National Commission for Enterprise in the Unorganised Sector chairman Arjun Sengupta told PTI: "We have already submitted a report to the prime minister for taking measures for protection of the unorganised sector amid this global slowdown."
A suggestion is to provide a Rs 10,000 crore (Rs 100 billion) loan package to this segment under the priority sector policy of all scheduled banks to avoid job cuts in the unorganised sector, which employs more than 92 per cent of the workforce and contributes 50 per cent to the nation's GDP, he added.
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