The Third Plan reflected the first signs of rethinking in the policy strategy by dedicating itself to ‘self sustaining growth’, which required ‘domestic saving to progressively meet the demand of investment and for the balance of payment gap to be bridged over’.
Gains in compensation per hour picked up over the past year, responding to a long period of very tight labor markets and the effects of an energy-induced run-up in consumer prices. Faster increases in hourly compensation, coupled with the cyclical slowdown in the growth of output per hour, have elevated the rate of increase in unit labor costs.