NEW YORK: Prime Minister Manmohan Singh has said that "extreme rigidities" of the labour market have affected the country's economic growth potential but limitations of a coalition government prevented him from carrying out reforms in a "big way."

"Extreme rigidities in the labour market, inflexibility of the labour market is not consistent in our achieving our goals in a world where demand conditions are changing so fast, technological conditions are changing so fast," he told McKinsey Quarterly, a publication of global management consultancy McKinsey and Co., in an interview.

Asked about the constraints faced by his Government due to its coalition nature, he said there were limitations "for the time being" and "we don't have the broad-based consensus in our coalition for me to assert that I can move forward in a big way" for reforms in the labour market. "But I do recognise that we should take credible action."

Pointing out that the Communist Government in West Bengal appreciated the need for labour market flexibility and was moving in the area of privatisation, Dr. Singh said the Left parties had to be convinced that what was good for the State was also good for the country.

"We may be slow moving but if we build a consensus, that would be far more durable than any other mechanism that I know of," he said. He expressed confidence that "the reforms will have more broad-based support."

The Prime Minister said his "first and foremost priority" was to get rid of chronic poverty, ignorance and disease. — PTI

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