Country has too many labour regulations: Raghuram Rajan

The country has the least number of workers protected under law in the world even as the country's labour market has too many regulations, Raghuram Rajan, chief economic adviser to the Finance Ministry, said on Friday.

"Country's labour market is over regulated but one of the features of labour market is that it gets the strongest protection under law. But if you look worker's protection in India compared to world, we have the least number of workers protected," Mr Rajan said.

Labour reforms have been pending in India for long. Amendments to various labour laws have been awaiting Parliamentary approval. Mr Rajan also emphasised careful implementation of the government's welfare programmes.

"The government's subsidies have to be carefully targeted, and subsidy programmes have to be efficient, we as poor country, cannot afford poorly targeted or inefficient welfare programme," he said.

On growth and equity, Mr Rajan said, "We currently have programmes like food, education health and pensions but the key question is how much should we do, who should we target."

Mr Rajan, a former chief economist of International Monetary Fund (IMF), predicted that welfare state in Europe and the US is unsustainable.