India is capable of achieving and sustaining double digit growth in the coming years if labour reforms are carried out to shift the workforce from agriculture to industry, eminent economist Arvind Panagariya said Friday.

Panagariya's analysis came days after Finance Minister P Chidambaram talked of the possibility of attaining 10 per cent growth in the next financial year.

"Achieving double digit growth is possible provided labour and education reforms are undertaken and infrastructure is improved," economics professor at Columbia University Panagaria said at a CII seminar.

Panagariya said the continued stress of the Planning Commission on developing agriculture sector will not add much to the Gross Domestic Product (GDP) of the country.

Although 60 per cent of the workforce in the country is dependent on agriculture, it is growing at a paltry rate.

"Labour market inflexibility is the basic reason behind the slow down of agriculture sector. Some labour force should be taken out of agriculture to manufacturing sector. The rest should be given contract farming," he opined.

Citing the example of China which has achieved a high economic growth by developing labour intensive techniques, Panagariya added that there is much scope of earnings in industrial sectors rather than agriculture sector.

He, however, warned the policy makers against their excessive focus on inequality and said the government is not following right path for bringing about equality in the society.

"Excessive focus on inequality will only slow down policy reform measures. Implementing the policy of developing skills of work force is of utmost importance now," he said.

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