Name: Sweta Singh
INCLUSIVE GROWTH: AN INDIAN EXPERIENCE
The present buzzword for India’s development strategy is inclusive growth. The role of state and market has been crucial in achieving rapid and inclusive growth. “Inclusive growth” means an emphasis towards more equitable distribution of income and building capabilities in terms of attainment of better health and education. The general notion about the success of inclusive growth is little apprehensive. The argument is although the poor are getting richer, the rich are getting richer faster than the poor. This is problematic as it can lead to an uneven distribution of income leading to social unrest. However, such an outcome is not surprising. Globally, economists measure growth as the percentage by which a nation’s output (GDP) has changed over a period of time. Reforms entail unequal payoff to economic agents. People with more skill stand to gain more compared to those with less skill sets. In the present context, the contribution of services sector to national income (GDP) is around 55 per cent, followed by manufacturing (26.4 per cent of GDP) and agriculture sector (18 per cent of GDP). A more equitable income distribution would require a scenario with more people earning their livelihood from agricultural sector and less people earning their livelihood from the services sector. The present situation, however, is quite the opposite. Around, 58.6 per cent of the Indian population earns its livelihood from agricultural and agricultural-related allied activities (such as cooperatives, fishing, dairies, etc.) compared to less than 10 per cent dependent on organized services sector. What is more worrying is that this inequality is going to increase as the agricultural sector is now growing at an annual rate of 2.6 per cent (from a lower base of 18 per cent growth) compared to services growing at 11 per cent (from a higher base of 55 per cent growth). There are too many people locked into the farm sector (with lower productivity and hence lower income) and there is an urgent need to absorb them either into manufacturing or into services sector (with higher productivity and hence higher income). India’s post 1990’s economic growth has made it one of the world’s fastest growing economies in the world. Its GDP growth rates of up to about 9% in the last few years is historically unparalleled except by the neighboring China. With the rapid growth rates, however, come new challenges and new questions. One such challenging question concerns the spread of the benefits of growth across different segments of society. To ensure that growth has been well distributed, India’s Planning Commission has made Inclusive Growth their explicit goal in the eleventh five-year plan. The concept of Inclusive Growth has dominated discussions across India. Its popularity has sparked intense discussions among politicians, economists, policymakers and the general public. KEYWORDS:
♣Function: A function is a rule that assigns exactly one output to each input. Functions are represented verbally by word descriptions, numerically in tables, visually with graphs, or algebraically with equations. If x is the input symbol and f is the rule, then f(x) symbolizes the output. Input/output diagrams display the input, how the input is measured (input units), the rule that relates the input and output; and the output, including how the output is measured (output units). ♣Market:
1. The interaction between supply and demand to determine the market price and corresponding quantity bought and sold. 2. The determination of economic allocations by decentralized, voluntary interactions among those who wish to buy and sell, responding to freely determined market prices. ♣Inflation: An ongoing rise in the average level of absolute prices. Increase in the overall price level of an economy, usually as...