India needs to grow at a rate of 8 per cent for the next 20 years to eradicate poverty, Reserve Bank of India chief economist Narendra Jadhav has said.
India's growth rate in the second quarter stood at 8 per cent, slightly down from 8.1 per cent in the first quarter of the current fiscal.
"To eradicate poverty, dependence on agriculture should be brought down and more thrust should be laid to employment generation in the manufacturing and services sector," Jadhav said.
Agriculture used to contribute about 50 per cent to the gross domestic product in 1951, which has been reduced to 21 per cent now.
"On the other hand, 60 per cent people of the country are still dependent on agriculture," he said, adding that a certain dichotomy gradually cropping up.
"While the contribution of industry in the GDP is going up every year, it is not absorbing the surplus labour from agriculture. It may cause a serious problem for India," Jadhav said.
Employment growth in the organised sector decelerated after the mid-1990s and turned negative by the late 1990s, he said.
However, the number of people living below poverty line has come down to 26 per cent from 36 per cent in the pre-reforms era, Jadhav said.
Pointing out that creation of rural infrastructure is one of the key answers to the problem, he said, the 'Bharat Nirman' initiative taken up by the government is an appropriate step in the right direction.
