General Studies Paper 3 (Indian Economy)
Question:- What is inclusive growth? Discuss the challenges associated with it in the light of India’s experience. Answer in 250 words (15 marks)
Jun 14, 2022

Introduction: Define inclusive growth in your own language or according to some international organization working for inclusive growth

Body Paragraph: Write about the challenges to inclusive growth in India. Use a schematic to list down the points on first sheet.

Conclusion: Stress on the importance of inclusive growth and conclude with a way forward.

Answer:-

INTRODUCTION:

According to United Nations Development Program (UNDP), inclusive growth is “the process and the outcome where all groups of people have participated in the organization of growth and have benefited equitably from it”. This implies that inclusive growth should include all sections as beneficiaries as well as partners in growth and that inclusion of the excluded should be embedded in the growth process viz.

-Employment Generation
-Women empowerment
-Good governance
-Skill building
-Equality of opportunity
-Poverty Reduction
-Social sector development
-Agricultural development
-Reduction in regional disparities

Broadly, there are the following challenges associated with inclusive growth with regards to India:

1. Poverty alleviation-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. Malnutrition among the children is highly prevalent- India ranks
101 in Global Hunger Index out of 116 countries.

2.Unemployment and underemployment– (Add latest Periodic Labor Force Survey data) The quality of employment is a problem as more than 80% of people work in the informal sector without any social security. Low investment, low capital utilization in industry and low agriculture growth lead to low job growth. Also, there’s a mismatch between the jobs available and skills of workforce.

3. Social and regional disparities –India is a status based society and hence, factors like the caste system, gap between urban and rural people, rich and poor etc. contribute to the disparities which create a system where some specific groups hold more privileges over others. (Social indicators are much lower for OBC, SC, ST, and Muslims). The percentage of women employed in urban areas has significantly reduced over the past decades (PLFS data)

4. Overpopulation– This has created overburden on land, water and air, hence causing pollution and degradation of resource quality.

5. Backwardness of agriculture– Around 44% of people in India have agriculture-related employment but its contribution to the Indian GDP is only 16.5% which leads to widespread poverty. Declining per capita land availability, a slow reduction in the share of employment, low labor productivity, decline in agriculture yield due to climate change, land degradation and unavailability of water are the issues that need to be addressed in agriculture.

6. Economic Growth– The trickle down effects of prosperity aren’t apparent in India. Social mobility is very hard for most of the people. In times of crisis, it’s the people at lower rungs of development that suffer the most.

 

CONCLUSION
Inclusive growth is a prerequisite for development which can contribute to improved livelihoods for people. Indian government along with the state and local governments should continue to focus on eradicating poverty and achieving sustainable development in order to improve the lives of people. Through innovative partnerships with international organizations, civil society groups , and private companies, inclusive and equitable growth can be targeted.
These steps will help us to achieve SDG-8 – promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
(You can add names of schemes which the GOI has launched over time for financial inclusion, skill development, employment generation, social upliftment etc.)