Employment generation in India: Role of GDP and FDI
Dr. VB Khandare
This study is mainly undertaken to study the relationship between gross domestic product and employment and the relationship between foreign direct investment and employment in India during 2001 to 2012. For analysis the relationship between dependent and independent variable the ordinary least square regression method has used. It is found that the highest 25.58 percent compound annual growth rate recorded by FDI followed by GDP 12.59 percent and it was only 0.49 percent for employment in India during 2001 to 2012. It is observed that there is positive relationship between FDI and employment and between GDP and employment in India. The coefficient of correlation indicates that the one unit increase in FDI will raise employment by 0.857 units and one unit increase of GDP will raise employment by 0.875 units in India. The P value 0.0004 of FDI and P value 0.0002 of GDP indicates that the coefficient of FDI variable and GDP variable is highly significant with employment generation in India during the study period. The P values indicate that the GDP variable is more significant than the variable of FDI. This result express that the increase in GDP and increase in FDI increases the employment in India. Therefore it is suggested that the policy maker should stabilize monetary and fiscal policies in long run to increase GDP and FDI for employment generation in India.