[Solved] What are the salient features of ‘Inclusive growth’? Has India been experiencing such a growth process? Analyse and suggest measures for inclusive growth? UPSC GS-3 Mains 2017)
Inclusive growth consists of ensuring that all marginalized and excluded groups are stakeholders in development processes.
Salient features of inclusive growth are-
• Participation– People are able to participate fully in economic life and have greater say over their future.
• Equity-More opportunities are available to enable upward mobility for more people. All segments of society, especially poor or socially disadvantaged groups, are able to take advantage of these opportunities.
• Growth– An economy is increasingly producing enough goods and services to enable broad gains in wellbeing and greater opportunity.
• Stability- Individuals, communities, businesses and governments have a sufficient degree of confidence in their future and an increased ability to predict the outcome of their economic decisions • Sustainability– Economic and social wealth is sustained over time, thus maintaining inter-generational well-being.
Overall it focusses more on the disadvantaged and marginal section of society like women, SC, ST, disabled, youth, children etc.
India is witnessing a high economic growth post- LPG reforms but they have not transformed into inclusive development as such-
Women: An unfavourable child sex ratio, high school drop-out rates, lower asset ownership, falling workforce participation levels, high levels of anaemia during adolescence and increasing incidence of violent crimes are reflective of the discriminatory practices against them.
Children: The number of working children in the 5-14 years age group is estimated to be 4.3 million. A number of child crimes like sexual harassment, child trafficking and child marriages are prevalent SC, ST and OBC: High incidence of poverty and illiteracy rates among SCs, STs and OBCs. While a larger share of resources has been allocated for the benefit of these communities, the actual utilisation of funds has been poor.
• They experience stigma and compromised dignity in their daily life.
• It has not received adequate attention from different Ministries and Departments.
• Problem of accessibility in public as well as private buildings and transportation.
Measures to achieve inclusive growth
• Improving the quality of education and increasing the access, affordability for marginalised section.
• Improving the healthcare facilities in rural as well as urban areas.
• Undertaking Legislative, Policy and Institutional Reforms for their upliftment.
• Strengthening the implementation of existing policies made by the government.
• Improving Access to Aids/Assistive technologies for PwDs
• Enhancing employability by skill development of SC, ST, women etc.
Elements of Inclusive Growth
- Harnessing the demographic dividend will depend upon the employability of the working age population, their health, education, vocational training and skills. Skill development plays a key role here.
- India is facing a dual challenge in skill development:
- First, there is a paucity of highly trained workforce
- Second, there is non-employment of conventionally trained youths
- According to the Economic Survey 2017, over 30% of youth in India are NEET (Not in education, employment or training).
- Similarly, UNICEF 2019 reports stats that at least 47% of Indian youth are not on track to have the education and skills necessary for employment in 2030.
- Financial Inclusion
- Financial Inclusion is the process of ensuring access to financial services to vulnerable groups at affordable costs.
- Financial inclusion is necessary for inclusive growth as it leads to the culture of saving, which initiates a virtuous cycle of economic development.
- Technological Advancement
- The world is moving towards an era of Industrial Revolution 4.0. These technological advancements have capabilities to both decrease or increase the inequality depending on the way these are being used.
- Several initiatives have been taken by the government, eg. Digital India Mission, so that a digitally literate population can leverage technology for endless possibilities.
- Technology can help to combat other challenges too, eg:
- Agriculture- Modern technology can help in making an agro-value chain from farmer to consumer more efficient and competitive.
- Manufacturing- Technology can resolve the problems of finance, procuring raw materials, land, and linkages with the user market. GST was made possible only with the help of sound technology.
- Education- Innovative digital technologies can create new forms of adaptive and peer learning, increasing access to trainers and mentors, providing useful data in real-time.
- Health- Technologies could transform the delivery of public health services – extend care through remote health services Governance- Technology can cut down delays, corruption, and inefficiency in the delivery of a public service Economic Growth
- India is among the fastest-growing major economies in the world. However, currently Indian economy is facing slowdown due to both cyclic and structural challenges.
- However, the target of becoming a $ 5 trillion economy by 2024-25 can allow India to reduce inequality, increase social expenditure and provide employment to all.
- Social Development
- It means the empowerment of all marginalised sections of the population like SC/ST/OBC/Minorities, women and transgenders.
- Empowerment can be done by improving institutions of the social structure i.e. hospitals especially primary care in the rural areas, schools, universities, etc.
- Investment in social structures will not only boost growth (by fiscal stimulus) but will also create a healthy and capable generation to handle future work.
- Challenges in Achieving Inclusive Growth
- As per the Multidimensional Poverty Index (MPI) 2018, India lifted 271 million people between 2005-06 and 2015-16, with the poorest regions, groups, and children, reducing poverty fastest. India demonstrates the clearest pro-poor pattern at the sub-national level.
- Still, despite the massive gains, 373 million Indians continue to experience acute deprivations. Additionally, 8.8% of the population lives in severe multidimensional poverty and 19.3% of the population are vulnerable to multidimensional poverty.
- As per the Periodic Labour Force Survey (PLFS) of NSSO, the unemployment rate among the urban workforce was 7.8%, while the unemployment rate for the rural workforce was 5.3% totaling the total unemployment rate at 6.1%.
- The quality and quantity of employment in India are low due to illiteracy and due to over-dependence on agriculture.
- The quality of employment is a problem as more than 80% of people work in the informal sector without any social security.
- Low job growth is due to the following factors:
- Low investment
- Low capital utilization in industry
- Low agriculture growth
- Agriculture Backwardness
- Around 44% of people in India have agriculture-related employment but its contribution to the Indian GDP is only 16.5% which lead to widespread poverty Issues in agriculture are as follows:
- Declining per capita land availability
- A slow reduction in the share of employment
- Low labour productivity
- Decline in agriculture yield due to climate change, land degradation and unavailability of water Disparities in growth across regions and crops
- Issues with Social Development
- Social development is one of the key concerns for inclusive growth. But it is facing some problems such as: Significant regional, social and gender disparities
- Low level and slow growth in public expenditure particularly in health and education The poor quality delivery system
- Social indicators are much lower for OBC, SC, ST, and Muslims
- Malnutrition among the children – India ranks 102nd in Global Hunger Index Regional Disparities
- Regional disparities are a major concern for India. Factors like the caste system, gap between rich and poor etc. contribute to the regional disparities which create a system where some specific groups hold more privileges over others.
- Some of the regional disparities problems are as follow:
- In terms of literacy rate, Kerala is the most literate state with 93.1% literacy, on the other hand, literacy rate of Bihar is only 63.82% In terms of per capita income, Goa’s per capita income is Rs 4,67,998 in 2018 while per capita income of Bihar is just one-tenth of that ie Rs 43,822 Measuring Inclusive Growth
- Inclusive Development Index (IDI)
- In the Inclusive Development Index (IDI) compiled by the World Economic Forum (WEF), India ranked 62nd out of 74 emerging countries and was among the least inclusive countries in Group of 20 (G-20) countries.
- The IDI is based on the idea that most people base their country’s growth not on GDP but by their own standard of living.
- It gives a measure of inequality based on three parameters: :
- Growth and development
- Inter-generational equity and sustainability.
- India also did not make it to the top 10 most inclusive emerging and developing economies, where its neighbours Nepal, China and Sri Lanka made a mark.
- India performed its best in terms of “intergenerational equity and sustainability”, ranking 44th, for which credit can be attributed to its demographic dividend.
- Social Progress Index (SPI)
- It is an aggregate index of social and environmental indicators which includes the following: Basic human need
- Foundation of well being
- Limitation of other indices:
- GDP: It does not include non-market activities.
- Excludes factors like environment, equality, etc
- Gini Coefficient:
- Only income inequalities are included and other inequalities like social inequality, equality of opportunities, etc are ignored.
- Gross Happiness Index:
- Ignores gender neutrality, education, etc
- The unequal distribution of wealth is ignored.
- Benefits of SPI:
- SPI measures the outcomes of the government measures rather than money spent. It also takes account of efficiency by which money spent by the government has been used.
- It is more comprehensive.
- Global Slavery Index
- It is released by the Walk Free Foundation of Australia.
- Modern Slavery means a situation where one person has taken away another person’s freedom, to control their body so that they can be exploited.
- Factors responsible for modern slavery:
- Absence of rights
- Lack of physical safety
- Access to necessities such as health care, education, food, etc
- Pattern of migration
- Government actions to reduce modern slavery:
- India has worked in the right direction by criminalizing trafficking, slavery, forced labor, child prostitution, and child marriage.
- Measures Taken India to Achieve Inclusive Growth
- Several schemes are being implemented by the government for inclusive growth which includes the following: Mahatma Gandhi National Rural Employment Guarantee Act Scheme (MGNREGA) Prime Minister’s Employment Generation Programme (PMEGP)
- Mudra Bank scheme
- Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
- Deendayal Antyodaya Yojana- National Urban Livelihoods Mission (DAY-NULM) Sarva Siksha Abhiyan (SSA)
- National Rural Health Mission (NRHM)
- Bharat Nirman
- Swachh Bharat Mission
- Mission Ayushman
- Pradhan Mantri Jan Dhan Yojana
- Government is working with NGOs and International groupings in policy making eg: DISHA Project is being implemented in partnership with UNDP for creating employment and entrepreneurship opportunities for women in India.
- NITI Aayog’s Strategy for New India @75 has the following objectives for the inclusive growth: To have a rapid growth, which reaches 9-10% by 2022-23, which is inclusive, clean, sustained and formalized.
- To Leverage technology for inclusive, sustainable and participatory development by 2022-23.
- To have an inclusive development in the cities to ensure that urban poor and slum dwellers including recent migrants can avail city services.
- To make schools more inclusive by addressing the barriers related to the physical environment (e.g. accessible toilets), admission procedures as well as curriculum design.
- To make higher education more inclusive for the most vulnerable groups.
- To provide quality ambulatory services for an inclusive package of diagnostic, curative, rehabilitative and palliative care, close to the people.
- To prepare an inclusive policy framework with citizens at the center
- World Economic Forum has suggested 3 practical ways by which countries can boost social inclusion as well as economic growth: First, countries should increase public and private investment in their citizens’ capabilities, which is the most important way they can durably lift their rate of productivity growth.
- Second, governments, together with employers’ and workers’ organizations, should upgrade national rules and institutions relating to work. These influence the quantity and distribution of job opportunities and compensation, and thus the level of purchasing power and aggregate demand within the economy.
- Third, countries should increase public and private investment in labor-intensive economic sectors that generate wider benefits for society. These include sustainable water, energy, digital, and transport infrastructure, care sectors, the rural economy, and education and training.
- Improving educational infrastructure by reducing the prevalence of school dropouts.
- Strengthening of rural infrastructure build-up.
- Introduction of more flexible labor law with gender equality.
- Promoting gender diversity in leadership positions.
- Boosting the manufacturing sector by developing comprehensive measures.
- Inclusive growth means, growth among all sections. Every section must contribute to that growth and benefits of that growth must reach to every section of society.
- If at all section want to contribute to the growth, they must have capacity to involve in economic activities. For that govt must provide health, education, skills, employment opportunities, infrastructural facilities.
- Good governance are the features of the inclusive growth. After liberalization India is experiencing high amount of growth consistently, but this growth is contributed some section and some sectors only, Though our GDP is rising people are not getting the benefits out of it.
That is why govt in its 11th and 12th five year plans emphasized on inclusive growth. In this growth model every section particularly vulnerable section are given more emphasis. They are empowered with necessary basic requirements, basic structural, infrastructural facilities. For example education for all, health facility for all, improve the institutional deliveries, reducing the IMR, MMR. Creating employment, targeting the agricultural growth, labour issues, problems of unorganized sector workers, women participation in work force, empowerment of specially abled persons, investment attraction, creating basic enmities etc, if we provide them then automatically that growth becomes inclusive growth.
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