Inclusive Growth in India

Inclusive Growth in India

Context: We will comprehensively discuss Inclusive Growth in India – Meaning, situation in India, Challenges India faces, Advantages of Inclusive growth and conclude with a way forward.

What is Inclusive Growth?
• Inclusive growth, as defined by OECD and UNDP, refers to fair economic growth that involves and benefits all segments of society, ensuring equal opportunities and outcomes irrespective of socio-economic factors.

Inclusive Growth in India:
• India right now is the fastest-growing economies globally. However, this growth has not resulted in a corresponding increase in its Human Development Index (HDI). According to the Human Development Report of 2021-22, India ranks 132 out of 191 countries.
• In the Inclusive Development Index (IDI), 2018 compiled by the World Economic Forum (WEF), India ranked 62nd out of 74 emerging countries and was among the least inclusive countries in G20 countries.

Which factors contribute to lack of Inclusive growth in India?
• Structural issues: India’s economy continues to be characterized by a large informal sector with limited job security and social benefits. For example, 80 % workforce is employed in the informal sector.
• Jobless Growth: India experienced job growth of 3% p.a in the 70s at a time when the economy grew at 3- 3.5% p.a but over the last 3 decades the economy grew at over 5-8% p.a but job growth has been close to 1% p.a.
• Historical issues pertaining to lack of education, job opportunities, discrimination against certain section of society has affected standard of living and education of some people.
• Gender Disparities: Gender disparities in employment persisted, with women often facing limited access to job opportunities, wage gaps, and social barriers to workforce participation.
• Other factors such as Skills mismatch, over-dependence on Agriculture, technological disruption, slow Industrialization, dearth of labour reforms have all contributed to lack of inclusive growth in India.

What are the advantages of Inclusive growth in India?
• Inclusive growth ensures economic stability by creating a more balanced distribution of wealth. When more people have access to resources, opportunities it will lead to better economic development.
• Skilled workmen, better education facilities contribute to overall human capital development of the nation. This fosters economic development and innovation.
• Formalization of economy through Inclusive growth will lead to increase in demand of goods, services.
• Promotes Social cohesion, stability and peace in the society as people are content with standard of living, there is equality and harmony in the society.

What do we need to do ensure Inclusive Growth?
• Improve access to quality education facilities primarily in Rural and remote areas.
• Create more jobs in labour intensive industries, manufacturing
• Expanding social safety nets like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), subsidized food programs, and healthcare initiatives can provide a safety net for vulnerable populations.
• Promote Gender equality through education opportunities for women, better political representation, access to better healthcare.
• Financial inclusion