Need for Inclusion

  • For India, it is a tough task to accomplish inclusive growth. In a democratic country India, majority of population living in rural India and to bringing them into the mainstream is main concern. The challenge for Indian government is to take the levels of growth to all section of the society and to all parts of the country.
  • The best way to realise inclusive growth is through developing people’s talents. It is said by government authorities that a multidimensional approach towards education and skills development is essential to achieve growth. The challenge of skills shortage can be addressed through public private partnership. Since independence, noteworthy improvement in India’s economic and social development made the nation to grow strongly in the 21st century.
  • India is the 7th major country by area and 2nd by population. Yet, India is far away from development while our neighbour China is advancing at a faster rate to become the largest economy of the world.
  • Rapid and sustained poverty reduction requires inclusive growth that permits people to contribute to and benefit from economic growth. Poverty in India is at 22% according to the Tendulkar committee report.
  • Rapid growth is necessary to reduce poverty but for this growth to be sustainable in the long run, it should be broad-based across sectors, and inclusive of the large part of the country’s labour force. This explanation of inclusive growth implies a direct link between the macro and micro determinants of growth.
  • The micro dimension denotes the importance of structural transformation for economic diversification and competition, including creative destruction of jobs and firms.
  • Inclusive growth is defined by many academicians as the pace and pattern of growth, which are considered interlinked, and therefore in need to be addressed together.
  • This inferred that inclusive growth should include all sections as recipients as well as partners in growth and that inclusion of the excluded should be embodied in the growth process.
  • Low agriculture growth, low-quality employment growth, low human development, rural-urban divides, gender and social inequalities, and regional disparities etc. are the problems for the nation.
  • Protests like the recent ones of Jats in Haryana, Patels in Gujarat will only rise if the issues of agriculture productivity, employment growth are not taken care of.
  • Labour productivity is very low due to in-formalisation and poor skill development.
  • Access to education and health is not the same for all sections of the population. Females are treated to be subordinate to males and are dependent on their families in all spheres. Inclusive growth is hence the key to women empowerment.
  • Regional inequalities are the cause for the rise in distress migration, either intra-state or inter-state. Distress migration further creates problems of housing, accommodation, safety, hygiene, and sanitation.
  • Financial Inclusion is the key to transforming the informal economy into the formal economy.
  • Corruption is still rampant in the country and prevents inclusive growth.
  • Political leadership plays a vital role in growth and development of the country. But implementation of many schemes is poor due to lack of political will.
  • The importance of inclusive growth is indisputable for sustainable growth.
  • Global warming and climate change affect poor more than the rich. Displaced population further increases distress migration and stress on state’s resources.
  • MDG report for India (2015) suggests that out of 18 indicators, India is on-track only in four indicators. In the rest of the indicators, India is identified as either off-track or moderately on-track. Achieving Sustainable Development Goals is not possible without concentrating on inclusive growth.
  • The inclusive growth approach takes huge perspective as the focus is on productive employment instead of direct income redistribution, as a means of increasing incomes for excluded groups.
  • In the short run, governments could use income distribution schemes to weaken negative impacts on the poor of strategies intended to jump start growth, but transfer schemes cannot be an answer in the long run and can be challenging also in the short run.
  • In poor countries such schemes can impose major burdens on already stretched budgets, and it is theoretically impossible to reduce poverty through redistribution in countries where average income falls below US$ 700 per year.
  • OECD study signified that even in developed countries, redistribution schemes cannot be the only response to rising poverty rates in certain segments of the populace.
  • Inclusive growth means economic growth that creates employment opportunities and helps in reducing poverty.
  • It means having access to essential services in health and education by the poor. It includes providing equality of opportunity, empowering people through education and skill development.
  • It also encompasses a growth process that is environment friendly growth, aims for good governance and helps in creation of a gender sensitive society.