Unemployment major challenge for India but reforms would create jobs:IMF

"Clearly India faces a challenge in terms of providing sufficient employment for a number of people looking for work and particularly young people. But yes, the measures and the reforms that India is undertaking will over medium term create jobs," the International Monetary Fund spokesperson, Gerry Rice, told reporters at a news conference here.

Noting that India has been one of the fastest growing large economies in recent times, he said this has led to improvement in reducing poverty and improvements in living standards.

"Our view is that recent reforms, particularly the implementation of GST, national goods and services tax, should help boost efficiency and productivity and overtime will contribute to help them create jobs in the formal sector," Rice said when asked if India is experiencing jobless growth.

In addition, the government recently took steps towards labor market flexibility by modifying labor rules. "We think that these reforms will help to increase employment, perhaps not overnight but over the medium term," he said.

And the continuation of micro economic policies, structural forms including reforms in the labor market, will not only boosts India's long-term growth but create jobs as well, Rice said.

"So we think, all of this will help to spur India's continuing catch up with advanced economies and create many jobs that are needed to employ people who are going to labor force," Rice said.