One of the biggest policy challenges facing India is to sustain economic growth that reduces poverty and is socially inclusive. The need of the hour is to embrace inclusive growth and explore ways of policy making so that the fruits of economic growth can be distributed equitably.
Inclusive growth has become a buzzword of the planning strategy in India. It has been the focus area of the 11th and 12th Five Year Plan. While India’s economy has grown at an impressive pace over the last two decades, as a result of wide ranging structural reforms, we have also witnessed that patterns of growth have resulted in development of islands of prosperity surrounded by seas of poverty and deprivation in India.
If we compare the development model of India along with the Chinese model of growth then we can see that china has had a spectacular economic growth for the last 30 years and that growth in inflation adjusted terms was almost 10 percent on a continuous basis. But the rate of growth of real wages in china for a large part of last 30 years was close to zero. But this is not what inclusive growth is all about. When you say inclusive growth, you necessarily bring in elements of fairness, equity and justice- Dr. Ajit Ranade, Chief Economist, Aditya Birla Management Corporation Private Limited.
Inclusive growth is ultimately related to reduction of poverty and inequality of growth for the poor. It means that growth that can benefit all sections of the society, including the poor, the near poor, middle income groups and even the rich. Inclusive growth implies reducing the disadvantages of the most disadvantaged while benefitting everyone.
We can say that there is an urgent need to have appropriate policies and incentives to deepen talent pools and to expand access to skill development programme to the disadvantaged sections of the population. If India wants to accomplish its ambitious target of inclusive growth then it is essential that India capitalises on its demographic dividend and harnesses its human capital on a sustained basis.
The gravest problem today is gender inequality and empowering women who are repressed and are lagging behind on most of the parameters of economic development and a probable solution to that problem can be inclusion of women in all aspects of the economic, social and political spheres of India.
India can truly progress only if rural India progresses. Unless rural India progresses where 70 percent of Indians live, all of India cannot progress. In the past decade India has seen unprecedented growth, but large part of India has not experienced the benefits of this growth. There are certain projects undertaken by G.o.I which have helped improve incomers and lives in rural India but we still have many challenges in nutrition, education, health and sanitation. Inclusive growth also implies ensuring that all families have access to basic amenities- safe drinking water, sanitation, food and employment security.
While growth can be triggered by market forces, the process of making this growth inclusive cannot be left on the market. That is where the role of G.o.I is very important. The biggest rural development challenge is ensuring that high economic growth benefits all sections of society.
In the last seven years, our achievement of poverty reduction has been the fastest in our post independence history. India has been the second fastest growing country in the world. So is the glass half empty or half full. I believe the answer is both.
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