What are the salient features of ‘inclusive growth’? Has India been experiencing such a growth process? Analyze and suggest measures for inclusive growth.( 250 Words, 15 Marks)

Inclusive growth, a concept integral to sustainable development, emphasizes the equitable distribution of economic benefits across all segments of society. This paradigm prioritizes not only overall economic growth but also its accessibility and positive impact on various social groups, ensuring that marginalized and vulnerable populations participate in and benefit from the development process. Several salient features define inclusive growth, including poverty reduction, improved income distribution, equal access to opportunities, and the enhancement of social welfare. In the context of India, the nation has made strides in economic development over the years, but the extent to which this growth has been inclusive remains a subject of scrutiny. While certain sectors and regions have witnessed significant progress, disparities persist, hindering the achievement of truly inclusive growth. This analysis explores India’s experience with inclusive growth, examining the existing challenges and disparities. Furthermore, the discussion delves into potential measures and policy interventions that can foster a more inclusive economic trajectory, ensuring that the benefits of growth reach all strata of society. Through a comprehensive examination, this essay aims to shed light on the nuances of inclusive growth in the Indian context and propose actionable recommendations to address the existing gaps.

Tag: Inclusive growth and issues arising from it.   

Decoding the Question:    

• In Intro, try to define inclusive growth.   
• In Body,   
• Discuss salient features of inclusive growth.   
• Discuss inclusive growth in India.   
• Measures to ensure inclusive growth in India.   
• Try to conclude with a futuristic outlook of inclusive growth.   

Answer:  

Inclusive growth refers to a growth process that benefits all segments of society, ensuring equitable distribution of opportunities and benefits. It encompasses measures to uplift marginalized and disadvantaged groups, reduce income inequality, and promote social cohesion. India, as a developing economy, has been striving to achieve inclusive growth to address its socio-economic challenges. Inclusive is economic growth that is distributed fairly across society and creates opportunity for all. In this inclusive growth marginalized sections, women, children, SC’s and ST’s. etc. get due share of fruits of economic growth.  

Salient Features of Inclusive Growth:   

1. Poverty Alleviation: The percentage of people living below the poverty line in India declined from 21.9% in 2011-12 to 8.2% in 2021-22, indicating progress in poverty alleviation efforts (source: World Bank). 

Example: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides 100 days of guaranteed wage employment to rural households, benefiting millions of impoverished individuals. 

2. Income Equality: India’s Gini coefficient, a measure of income inequality, stood at around 35.7 as of 2022 (source: World Bank). 

Example: Progressive taxation policies, where higher income groups are taxed at higher rates, contribute to reducing income inequality and redistributing wealth more equitably. 

3. Social Inclusion: The enrollment rate of girls in elementary education in India increased from 92.3% in 2014-15 to 95.4% in 2022-23, reflecting improved access to education for girls (source: Ministry of Education). 

Example: Reservation policies in educational institutions and government jobs for historically marginalized communities, such as Scheduled Castes and Scheduled Tribes, promote social inclusion. 

4. Human Development: The literacy rate in India increased from 64.8% in 2001 to 77.7% in 2011, indicating progress in education and human development (source: Census of India). 

Example: The National Health Mission aims to improve healthcare infrastructure and services, including maternal and child health, to enhance the overall well-being of the population. 

5. Sustainable Development: India’s renewable energy capacity reached 114 GW in 2023, contributing to reducing the country’s carbon footprint (source: Ministry of New and Renewable Energy). 

Example: The National Clean Air Program aims to curb air pollution in major cities by promoting cleaner technologies and sustainable practices. 

6. Employment Generation: The Pradhan Mantri Employment Generation Programme (PMEGP) has generated over 31.13 lakh employment opportunities since its inception in 2022-23 (source: Ministry of MSME). 

Example: Skill development initiatives, like Skill India and National Apprenticeship Promotion Scheme, equip individuals with job-ready skills, increasing employability. 

7. Access to Financial Services: The number of Jan Dhan accounts opened under PMJDY surpassed 43.6 crore as of 2022 (source: Ministry of Finance). 

Example: Financial inclusion initiatives provide banking services to underserved areas, empowering individuals to access credit and savings facilities. 

8. Empowerment of Marginalized Groups: The percentage of women in India’s workforce increased from 25.8% in 2012 to 32.5% in 2023, reflecting increased participation of women in economic activities (source: World Bank). 

Example: Women-centric schemes like Beti Bachao, Beti Padhao, and Women Self-Help Groups provide support and opportunities for women’s empowerment. 

9. Regional Development: As part of the National Infrastructure Pipeline, In the Union Budget 2022-23, the North-Eastern Region was allocated INR 36,000 crore (approximately $4.9 billion) for infrastructure development under the National Infrastructure Pipeline (source: Ministry of Finance). As of 2021, India had over 250 operational SEZs (source: Ministry of Commerce and Industry). 

Example: The establishment of SEZs in states like Gujarat, Maharashtra, Tamil Nadu, and Andhra Pradesh has led to increased industrialization, job creation, and export-oriented growth, contributing to regional development. 

10. Social Safety Nets: The number of beneficiaries under the National Food Security Act, 2013, reached approximately 81.35 crore as of 2022 (source: Department of Food & Public Distribution). As of 2022, approximately 81.35 crore people across the country are covered under the NFSA. 

Example:  Antyodaya Anna Yojana households, which are considered the most vulnerable, receive 35 kilograms of food grains per family per month at even lower prices. 

India inclusive growth: India has witnessed higher economic growth but unfortunately it did not convert it into inclusive growth for all. This is evident from the fact that since the tenth Five Year Plan the theme of planning in India has been inclusive growth.   

1. GDP Growth:  India’s GDP growth rate has seen fluctuations over the years. For example, in the fiscal year 2016-2017, the GDP growth rate was 8.2%, while it slowed to 4.0% in 2020-2021 due to the impact of the COVID-19 pandemic. 

Example: Despite the challenges posed by the pandemic, India’s economy rebounded in subsequent years, and in 2021-2022, the GDP growth rate surged to 9.5%, one of the highest rates among major economies. 

2. Service Sector Growth: The services sector has been a significant contributor to India’s GDP. As of 2020, the services sector accounted for around 54% of India’s GDP. 

Example: India’s IT and IT-enabled services industry had become a global leader. Many multinational companies established their technology and service centers in India, leading to job creation and substantial foreign exchange earnings through exports. 

3. Start-up Ecosystem: As of September 2021, India was home to more than 60,000 start-ups across various sectors, making it one of the largest start-up ecosystems globally. 

Example: Companies like Flipkart (e-commerce), Ola (ride-hailing), and Paytm (fintech) are prominent examples of successful Indian start-ups that have garnered significant investments and recognition both domestically and internationally. 

4. Foreign Direct Investment (FDI): India had been consistently attracting FDI inflows. In the financial year 2020-2021, despite the pandemic, India attracted FDI worth $81.72 billion, a 10% increase from the previous year. 

Example: Several multinational corporations, such as Amazon, Google, and Walmart, invested heavily in India, recognizing the country’s vast market potential and business-friendly policies. 

5. Infrastructure Development: India has been investing in various infrastructure projects. In 2021, the government announced the National Infrastructure Pipeline (NIP) with an investment target of ₹111 lakh crore over five years (approximately $1.5 trillion) to boost infrastructure development. 

Example: The development of the Delhi-Mumbai Industrial Corridor (DMIC) aimed to create a high-capacity industrial zone and smart cities along the corridor to enhance economic activities and trade. 

6. Manufacturing Initiatives: The “Make in India” campaign launched in 2014 aimed to increase the share of manufacturing in GDP from 16% to 25% and create millions of new jobs by attracting investments and promoting domestic manufacturing. 

Example: The campaign facilitated the establishment of manufacturing units by companies like Xiaomi, Samsung, and Apple in India, leading to increased local production of smartphones and electronic devices. 

7. Financial Inclusion: The Pradhan Mantri Jan Dhan Yojana (PMJDY), launched in 2014, aimed to provide access to banking services to the unbanked population. 

Example: As of September 2021, more than 430 million bank accounts were opened under PMJDY, bringing millions of people into the formal banking system and promoting financial literacy and inclusion. 

8. Renewable Energy: India has been making significant strides in adopting renewable energy sources. As of 2021, India ranked third globally in terms of installed renewable energy capacity. 

Example: The world’s largest solar park, the Pavagada Solar Park in Karnataka, with a capacity of over 2,000 megawatts, is an example of India’s commitment to scaling up renewable energy production. 

Measures for inclusive growth:  

1. Rural Development: 

• MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act): As of 2021, over 15.4 crore households have been provided employment under MGNREGA. Around 263.5 crore person-days of employment have been generated in 2020-2021. The average wage rate under MGNREGA has increased over the years, reaching Rs. 202 in 2020-2021. 
• PMGSY (Pradhan Mantri Gram Sadak Yojana): Over 1.4 lakh habitations have been connected with all-weather roads as of 2024. More than 6.47 lakh kilometers of roads have been constructed under PMGSY since its inception. 

2. Inclusive Financial and Business Support: 

• Jan Dhan Yojana: As of September 2022, over 43.4 crore bank accounts have been opened under Jan Dhan Yojana. The scheme has mobilized over Rs. 1,49,000 crore in deposits. 
• The Stand-Up India scheme, launched in 2016, promotes entrepreneurship among women and SC/ST individuals by providing ₹10 lakh to ₹1 crore loans for setting up new ventures, with at least one woman and one SC/ST borrower per bank branch. 
• The Pradhan Mantri MUDRA Yojana (Micro Units Development and Refinance Agency) was launched in 2015 to provide financial support to micro and small enterprises. It offers loans at different stages of business growth – Shishu (up to ₹50,000), Kishor (₹50,001 to ₹5 lakh), and Tarun (₹5,00,001 to ₹10 lakh). 

3. Education and Skill Development: 

• Sarva Shiksha Abhiyan (SSA): The Gross Enrollment Ratio (GER) in elementary education was 96.7% in 2019-2020. The number of out-of-school children in the age group of 6-14 years reduced to 60.64 lakhs in 2019-2020 from 134 lakhs in 2005. 
• Right to Education (RTE) Act: Enacted in 2009, the RTE Act guarantees free and compulsory education to all children aged 6 to 14 years. It has played a crucial role in improving access to education for marginalized sections of society. 
• Skill India Mission: As of 2022, over 2.5 crore individuals have been trained under various skill development programs. The National Skill Development Corporation (NSDC) aims to employ 15 crore people by 2022. 
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): This scheme was launched in 2015 to provide skill training to the youth across the country. As of 2021, more than 96 lakh candidates had been trained under this program. 

4. Healthcare & Social Security : 

• Ayushman Bharat –  Pradhan Mantri Jan Arogya Yojana (AB-PMJAY):  Launched in 2018 Over 2.3 crore hospitalizations have been provided under AB-PMJAY as of 2021. The scheme has provided health coverage to more than 10.4 crore vulnerable families. 
• National Social Assistance Programme (NSAP): As of 2022, around 3.4 crore beneficiaries are receiving financial assistance under NSAP. 
• Pradhan Mantri Vaya Vandana Yojana (PMVVY): As of 2022, over 38.9 lakh senior citizens have availed the benefits of PMVVY. 
• National Rural Health Mission (NRHM): Started in 2005, this mission aims to improve healthcare facilities in rural areas, with a focus on maternal and child health. It has significantly contributed to the reduction of maternal and infant mortality rates. 

5. Agricultural Reforms: 

• PM-KISAN (Pradhan Mantri Kisan Samman Nidhi): Over 11.5 crore farmer families have been provided financial assistance under PM-KISAN as of 2022. The scheme has transferred over Rs. 1.68 lakh crore to farmers’ accounts. 
• Agricultural Produce Market Committee (APMC) Reforms: Various states have enacted agricultural marketing reforms to create a more competitive and transparent marketplace for farmers. 

6. Gender Equality and Women Empowerment: 

• According to the World Bank, India’s female labor force participation rate stood at around 20-25% in recent years, significantly lower than the global average. 
• As per the 2011 Census, the female literacy rate was 65.5% compared to 82.1% for males. 
• In 2022, women held about 14% of seats in the Lok Sabha (lower house of Parliament) and around 9% in State Legislative Assemblies. the 73rd and 74th Constitutional Amendments that reserve one-third of seats for women in Panchayats (local village councils) and Municipalities. 
• Example: The Indian government has launched various initiatives like the National Rural Livelihood Mission (NRLM) and the Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM) and The Beti Bachao, Beti Padhao (Save the Daughter, Educate the Daughter) campaign was launched by the government to address the declining child sex ratio and promote the education of girls. 

7. Job Creation & Employment :  

• According to a report by the International Labour Organization (ILO) in 2022, approximately 81% of India’s workforce was engaged in informal employment. 
• Launched in 2014, the “Make in India” and The “Startup India” initiative, launched in 2016, aims to promote entrepreneurship and India as a global manufacturing hub by encouraging domestic and foreign companies to invest in various sectors.  
• The NREGA, launched in 2005, guarantees 100 days of wage employment to rural households willing to do unskilled manual work.  
• Pradhan Mantri Rojgar Protsahan Yojana (PMRPY):Launched in 2016, PMRPY encourages employers to hire more employees in the formal sector by reimbursing the employer’s contribution to the Employee Provident Fund (EPF) and Employee State Insurance (ESI) for new employees. 

Though the government has taken various steps and initiatives for achieving inclusive growth but still there are various hurdles which make it impossible for inclusive growth. Making India a giant economy but without addressing inequality is against the constitutional objectives of economic, social, and political justice that needs to be achieved through inclusive growth. 

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