Measures taken by India since independence to ensure inclusive growth in the economy

Components of Inclusive Growth – 11th 5year Plan

  • Access to essential services
  • Employment Generation
  • Women empowerment
  • Good governance
  • Skill building
  • Equality of opportunity
  • Poverty Reduction


Inclusive Growth and 12th Five Year Plans

  • The plan document begins with anticipating three economic scenarios at the end of the 12th plan. These three scenarios are “Strong inclusive growth”, “Insufficient action” and “Policy Logjam”.
  • The first one viz. Strong inclusive growth is the most optimistic one but needs effective implementation and a robust government.

The plan document discusses the following aspects of inclusiveness:

  • Inclusiveness as Poverty Reduction: So that adequate flow of benefits to the poor and the most marginalised.
  • Inclusiveness as Group Equality: The poor are certainly one target group, but inclusiveness must also embrace the concern of other groups such as the Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Minorities, women, the differently abled and other marginalised groups.
  • Inclusiveness as Regional Balance: This aspect of inclusiveness relates to whether all States, and indeed all regions, are seen to benefit from the growth process. Improvement in infrastructure must therefore be an important component of any regionally inclusive development strategy.
  • Inclusiveness as Reducing Inequality: There is a need to keep inequality into tolerable limits.
  • Inclusiveness as Empowerment: The Plan document says that inclusiveness is not just about ensuring a broad-based flow of benefits or economic opportunities; it is also about empowerment and participation.
  • Inclusiveness through Employment Programmes: The document stresses on the quality of assets created, which will determine whether MGNREGA can go beyond the safety net to become a springboard for entrepreneurship, even at the lowest income levels.


NITI Aayog’s Strategy for inclusive growth:

New India @75 vision has the following objectives for the inclusive growth:

  1. To have a rapid growth, which reaches 9-10% by 2022-23, which is inclusive, clean, sustained and formalized.
  2. To Leverage technology for inclusive, sustainable and participatory development by 2022-23.
  3. To have an inclusive development in the cities to ensure that urban poor and slum dwellers including recent migrants can avail city services.
  4. 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.
  5. To make higher education more inclusive for the most vulnerable groups.
  6. To provide quality ambulatory services for an inclusive package of diagnostic, curative, rehabilitative and palliative care, close to the people.
  7. To prepare an inclusive policy framework with citizens at the centre.


Policy Approaches for Inclusive Growth:

As far as the policy framework is concerned, the govt. lacks a suitable policy vis-a-vis Inclusive Growth. Nonetheless, the govt. has experimented with various models of Inclusive Growth.

According to World Bank’s review of India’s Development Policy, Inclusive Growth policy implementation is facing a dilemma of improving the delivery of core public services, and maintaining rapid growth while spreading the benefits of this growth more widely.

The strategy for the inclusive growth per needs to be an integrating strategy comprising state, market, civil societies and common man.

Since independence, the govt. has practiced various types of policy measures, a few are discussed ahead:


Growth oriented policy:

    • India’s economic planning started with growth oriented policy. First plan (1951-56) was started with an objective of rapid and balanced growth.
    • The second plan (1956-61) also put a thrust on rapid growth of industrialization. More recent, twelfth five year plan (2007-12) has blended economic growth with inclusion with an objective of Faster,
    • Sustainable and More Inclusive Growth. Arvind Virmani, ex-chief economic advisor to govt. of India has divided the policy approaches for economic growth in following phases:
      • Phase 1: 1950-1 to 1979-80 (two sub-phases: 1950 50-65 to 1966-79)
      • Phase 2: 1980-81 to 1993-94 (change in policy regime, reform initiation and structural adjustment in the economic policy.)
      • Phase 3: 1994-5 to onwards (Statistical significant growth break (1994-5) and rising growth trend)
    • The rate of economic growth has increased with time, particularly in phase 3, which is a result of radical reforms during 1990s.
    • However, it has failed to emphasize inclusive growth by creating more jobs for low and semi-skilled workers. Growth is not equally shared and in many parts of the country, people still remain poor and disadvantaged in significant proportion.


Direct intervention:

    • The direct intervention is facilitating the Inclusive Growth through legislation, regulation, credit facilitation and providing livelihood security are the forms of direct intervention by the govt.
    • Now, the orientation of administrative machinery is transformed from regulator to facilitator. Govt. direct intervention from the perspective of Inclusive Growth now be seen in making available the requisite social investment, establishing independent regulatory institutional mechanism, drafting incentive based policy and encouraging entrepreneurial innovation.
    • Safety nets or anti-poverty measures are the some other ways of direct intervention of the govt. towards Inclusive Growth.


Capacity Building:

    • Skill development is basically capacity development. However, capacity development is not only limited to skill building or entrepreneurial innovation.
    • Capacity development through training of rural development functionaries is also a mean of capacity building. Now, creating job and market demand is not the only criteria of capacity development.
    • Increasing efficiency, effectiveness, accountability and transparency are also considered the areas under capacity building initiatives of the govt. For example, if the objective of Department of Rural Development is enhancing the livelihood security of households in rural areas though MNREGA then capacity building for enhancing effectiveness of Gram Sabha is one of the modalities to achieve the objective.


Welfare schemes:

    • Food subsidies, public distribution of essential commodities, nutrition programs, financial support though micro finance are examples of the ways in which welfare schemes are implemented.
    • For different types of beneficiaries (women, Children, BPL etc.) central and state govt. have come with the customized welfare schemes. The approach in welfare schemes is to benefit the beneficiaries through optimal allocation of resources and access to essential services.
    • Integrated Child Development Scheme is a type of welfare scheme with children and women as beneficiaries. It is India’s flagship scheme for the nutritional and developmental needs of children.


Public Participation:

    • Without public participation at different level of governance, Inclusive Growth remains a distant dream. Govt. is encouraging the public participation in multifarious ways towards which the common man must show an affirmative and pro-active response.
    • SHGs promotion is a typical example of public participation for Inclusive Growth. Govt. can provide the supporting platform for citizen centric services, the responsibility to deliver still is of the common man.
    • SHGs support and promotion programs have yielded good results in South Indian states, Kerala and Andhra Pradesh particularly. Kerala govt. supported Kudumbasree programme have been successful in women empowerment and reducing poverty. Similar initiative of Andhra Pradesh namely ‘Indira Kranti Pathakam’ is showing a good progress in social mobilization, gender empowerment and rural poverty reduction.
    • Lastly, policy intervention takes place both at micro and macro level. Improving fiscal discipline, trade liberalization, promoting Foreign Direct Investment, privatization, deregulation, tax reforms, labour laws, social safety nets, public expenditure etc. are important for macro policy measures while at the micro level, reducing inequality in income, improving public/social infrastructure, healthcare, education, access to essential services, accountability and transparency, women empowerment, role of civil society organizations, etc are instrument of micro policy which needs to be re-worked.