Inclusive Growth

Does inclusive growth has been happened to our country?

Looking at the rates of poverty, unemployment and malnutrition in India, I would say no.
Probably growth is important, but only reaches a selected few. Probably classism exists here too. Probably growth helps only a few classes and enables them to live a better life. Probably it is not just growth that leads to a better life but other elements and factors that are often missed out in growth. Probably there is a need to redefine growth.

Probably all this is true and if the probability of what I am saying is high, who will make a change?
India’s economy is currently in its boom phase with the growth rate of about 7%.  Where on one side India s economy is booming at a rate of 7%, the growth in employment remains stagnant at 2%. Thus accompanying this rosy picture of development is also a grim side of growth. What good is growth in an economy if it has been unable to resolve the basic problems of poverty and unemployment in an economy?

The biggest problem in India has been that growth has not been inclusive. While growth has benefited a few, many have been left out from its reach and benefits of economic growth have not been equitably shared. The neo-liberal policies guarantee growth, however, is it just about the rate of growth or also about its nature, composition and implications on various socio-economic classes?

In an economy, it is usually believed that when growth takes place, trickledown effect also accompanies it and eventually the benefits of growth reach everyone. According to trickledown effect, growth initially benefits the high income groups and the benefits eventually trickle down to the lower income groups. However, while this concept looks feasible in theory, in reality, it does not exist. If it did, we wouldn’t be experiencing the massive inequality gap that we are experiencing in India.

Thus, there is a need to redefine growth. Growth needs to be made inclusive. It must tackle inequalities in incomes, health, education and well-being. For this to be achieved, barriers to inclusive growth must be broken down and changes must be brought about in policy making and its implementation.

Everyone should be able to realize their potential and to share the benefits of growth and increased prosperity regardless of their economic class, gender, sex, disability and religion. Inclusive growth refers to both the pace and the pattern of the economic growth and implies a direct link between the macroeconomic and micro economic determinants of the economy and economic growth.

The inclusive growth approach takes a longer term perspective as the focus is on productive employment rather than on direct income redistribution, as a means of increasing incomes for excluded groups. Thus distinct from income distribution schemes which can in the short run reduce the disparities, between the rich and the poor, inclusive growth implies sustainable growth. While income distribution schemes can allow people to benefit from economic growth in the short run, inclusive growth allows people to contribute to and benefit from economic growth in the long run. Inclusive growth may also make the poverty reduction efforts more effective by creating economic opportunities for the poor and vulnerable sections of the society.

Sustainable economic growth requires inclusive growth. However, achieving inclusive growth is sometimes difficult because economic growth may give rise to negative externalities including a rise in corruption, which is evidently felt and seen in every sphere of our Indian economy.

However, an emphasis on inclusiveness still remains very important as it guarantees equality of opportunity in different terms including access to markets, resources, and an unbiased regulatory environment. It is an essential ingredient of successful growth. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living which may look like a difficult task to achieve at first, and doesn’t suit the interests of many but eventually ensures benefits for all. Hence, we must think about the betterment of each and every section of our society and lay pro-people comprehensive policies that redefine growth to be inclusive.