Paul Krugman in a conversation with Arvind Subramaniam said he was worried about India exacerbating inequality and producing virtually no jobs now.

"One thing that does worry me about India's economic profile is its path. There's this precocious development of skill intensive industries, skill intensive services in particular," Krugman said.

He was responding to a query -- Will high and capital technology actually increase the costs for industry and increased poverty and unemployment in countries such as India and Bangladesh?-- posed by former chief economic advisor Arvind Subramanian.

Krugman said skill intensive industries generate a lot of gross domestic product (GDP) and exports but they do not generate a lot of jobs, and probably significantly exacerbated inequality.

"So yes, I mean there's a mystery something we don't fully understand actually," he said at an event titled -- Is Labour-Intensive Exporting Still A Feasible Development Strategy?.
Krugman said if you looked at the initial wave of export oriented development, particularly Korea and Taiwan, it was also about equalising development.
"And we haven't seen that since actually in any of the countries even China which did a lot the labour exporting but coupled it with rising inequality,'' Krugman said.

He said even the US with the administrative and political capacity has an extremely hard time tackling extreme inequality.

Krugman said if you looked at the initial wave of export oriented development, particularly Korea and Taiwan, it was also about equalising development.

India's economic development which saw early progress of skill intensive industries and services worries Nobel laureate Paul Krugman.
"One thing that does worry me about India's economic profile is its path. There's this precocious development of skill intensive industries, skill intensive services in particular," Krugman said.

He was responding to a query -- Will high and capital technology actually increase the costs for industry and increased poverty and unemployment in countries such as India and Bangladesh?-- posed by former chief economic advisor Arvind Subramanian.