With UPA’s election campaign in 2004 highlighting “India Shining” vs “Aam Aadmi”, need for sustainable balance between growth and inclusion gained impetus.
Inclusive growth is a process in which economic growth measured by a sustained expansion of GDP distributes the benefits to all sections of the society ranging from extremely poor to the vulnerable to the privileged elite. Any economy undergoes inclusive growth if it provides opportunity for people to earn a living and increase their incomes over time, if it offers ways to enhance their capabilities to exploit available opportunities, if the economy gives access to bring opportunities and capabilities together and if each and every section of the society has security to protect itself against a temporary or a permanent loss of livelihood.
Looking at our own country, since the last two decades, economic growth has increased but inequalities have also widened and exclusion still continues.
India is considered to have the best as well as the worst of the world. Exclusiveness in India can be seen from the fact that India on one hand is an emerging global superpower, joining the elite club of acknowledged nuclear power; on the other hand, it has the highest child malnutrition rates in the world. We have parts of Urban India competing successfully in low and high skilled services such as call centers, consulting, software engineering, and biomedical research. However, over half of the labor force works in agriculture, often in conditions and with results that were surpassed centuries ago.
Even our education system is not far behind with the story of exclusiveness. While top students from IITs and IIMs in many ways set global standards, they are globally competitive and have achieved top starting salaries approaching 1 crore rupees per annum. On the other hand we also have people who have never been to schools. The First Annual Status of Education Report (ASER) found that in the worst five states more than half of the children in class V could not read at the levels expected of class two children and more than 2/3rds could not solve a simple division math.
The health care industry is also not left untouched by the widening gaps. There are hospitals such as Apollo, Escort where in foreigners also visit for their high quality, low cost medical treatment and also because the conditions of the typical Primary Health Centers (PHC) are extremely deplorable. According to a survey conducted the Public Primary Health Centre has more than a 50-50 chance of recommending a harmful treatment.
While Delhi’s metro rail is a 21st century marvel, there are rural roads in many states which demand repair and are impassable. Even the absolute wage gains have been concentrated at the top. Daily wages which was increased by about Rs5/day (1993-94) for bottom deciles, Rs 10/day for median worker wages, and increased by Rs 90/day for workers in the top 10per cent of wage earners.
No doubt, parts of India are shining- the intensity of light heightens the contrast with shadows where shine has not reached.
Therefore, there is need for economic reforms with equitable development.
Inclusive growth can come about with these five elements-
1.) Poverty reduction
2.) Agricultural development
3.) Social sector development
4.) Reduction in regional disparities
5.) Protecting the environment
Macroeconomic, macro poor policies pursued by the government should be pro poor and people centric. Growth and equity should be pursued simultaneously to bring about inclusive growth. Structural changes need to be followed in the sequence of agriculture to industries to services.
Development of manufacturing sector is important for creation of productive employment. Equality of opportunities, technological advancement and women’s economic and social empowerment are necessary to do away with exclusiveness.
With the 11th Five Year Plan (2007-2012) focusing “towards faster and more inclusive growth…” materializing it is more challenging for a country than getting 8-10 per cent growth in its GDP. India is a democracy and the government cannot afford to ignore the large sections of working and non-working population.
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