Inclusive Growth - Dimention

Inclusive Growth - Dimention

Dr. Devendra Prasad

University Professor

P.G. Department of Applied Economics & Commerce

Magadh University, Bodh Gaya

Mobile No. 09934973002

Dr. Chitranjan Ojha

Lecturer

P.G. Department of Applied Economics & Commerce

Magadh University, Bodh Gaya

Mobile No. 09430601544

Abstract

According to the Oxford Dictionary the most common meaning of the term “inclusive” is “not excluding any section of society”. Here we can define inclusive growth as a new economic strategy which takes into account the betterment of every section of the society. In this sense, the little of the approach paper on the Eleventh Five Year Plan “Towards faster and more inclusive growth” reflects the need to make growth “more inclusive” in terms of benefits flowing through more employment and income to those sections of society, which have been bypassed by higher rates of economic growth witnessed in recent years. India represents a paradoxical dynamics with its high growth and fast expanding rich and middle class on the one hand and lack of minimum income and other basic facilities for a large chunk of population. Our country has covered a long way but it has a much longer way still remained to cover. It is not being increasingly realised that economic growth alone is not enough, if it does not provide a flow of benefit that is sufficiently widespread. Of course, we need a faster growth because we must expand the productive base of the economy, if we want to provide broad based improvement in the material condition of our people.

Meaning OF INCLUSIVE GROWTH:

WHY A SPECIAL FOCUS on inclusive GROWTH:

The approach paper of Eleventh Five Year Plan comes at a time when the Indian economy has reached on cross roads. There are disparities looking at inter-personal and inter-regional level. The differences at various level across the states have long been a cause of concern. The problems of severe imbalances within states are increasing. Not only are this but there gap between different social groups in India, more glaring in case of SCs, STs, and minorities. These groups are still continuing to lag behind the rest. Another important aspect of differences is gender discrimination Similarity a wide gap from development point of view between urban and rural India has become a truism of our times.

Recent Trend of Economic Development:

India is changing at a very fast rate since the past decade. The GDP growth trend has transformed from 3.5% per annum to 8 to 9% per annum. But the maximum contribution to GDP comes from a much diversified and advanced manufacturing and service sectors. From a poor and static country of villages, India has graduated into a progressive and dynamic economy.

But whether the poor are included in this changing scenario is a burning question arises before us. On one hand big cities are propounded the virtues of emerging super power status in India, the country-side on the other hand is still suffering acutely from the withdrawal syndrome. Not only has this but the recent acceleration in economic growth been exclusive and not inclusive. It is evident from the fact that the growth not located in sector where labour is concentrated, we mean agriculture sector and also in regions where poverty is concentrated, for example, Bihar, Orissa, M.P., U.P. and Jharkhand. A few points mentioned in this paper to judge the dimensions of inclusive growth which is the focal point in 11th Five Year Plan of the Country.

Sectoral GDP Growth

As it is stated above agriculture sector has been experiencing declaration in growth since mid-nineties with no improvement in sight. The annual agricultural GDP increased at 2.7% in 2006-2007 and 2.6% 2004-05. Again in 2007-2008 it remained at 2.6% round about. Thus in the post reform period overall high GDP growth accompanied by low agricultural growth has brought a distinct shift in the structural distribution of GDP which is skewed against agriculture. The share of agricultural labour force has marginally declined from 70% in pre-reform period to 65% in recent years. Evidently this type of growth is an indication of exclusiveness of growth. In the report of National Commission, it is mentioned that the small and marginal farmers households accounting for 84% of the farm sector, are forced to spend more than what they earn. Earnings of such families in a month are Rs. 2115 while their expenditure is a month is Rs. 2770 which consequently put them in debt trap.

In contrast, the service sector has sustained its high growth and contributed substantially to over all growth. during 2006-07, the service sector grew by 11% slightly up from 10.3% in 2005-06. It contributed about 51% in the overall increase of GDP. Thus the service sector which constituted less than 20% of total workforce but accounted for more than half of G.D.P. By this way benefits of recent acceleration in GDP is reaped by the educated and people belonging to managerial and professional occupation.

Regional Disparity in GDP GROWTH:

Regional imbalances from the view point of economic growth in India are the evidence of exclusiveness. Here the pace of development of various across regions. No doubt that 40% of population living in the six states of Bihar, Jharkhand, M.P., U.P. Orissa and Chhattisgarh generates just about 20% of total GDP in the country. Certainly the growth rates registered in these six low income states were lower than that of other parts of the country. A report published by World Bank in 2007 in respect of India’s long term growth revealed that annual compound increase in state domestic product between 1980-2003 was the lowest in Bihar 3.6% followed by 3.9% in U.P., 4% in Orissa, 4.8% in M.P. while the national average of that period was 5.9%. On the other hand the annual compound growth rate in Karnataka was 6.7%, Maharashtra 6% and Gujarat 6.5% during the same period.

Non-Income Dimention of DEPRIVATION:

By and large, a major part of Indians today are neither better fed nor more educated and live longer. An average Indian is 3.5% times richer that his counterpart in 1951. The strides in technology have made a number of goods and services available which were the heard 60 years ago. India’s idle class is fast expanding and boosting its consumption with newly find wealth. The World Bank Report says, India has over one lakh dollar millionaire.

But another set of facts can not be side tracked or suppressed. Simultaneously we have the larger number of the poor, illiterate and malnourished in the world. As a nation we occupy a very low ranking in human development index. From this point of view India has sliped to 128 among 177 countries in 2007 from 126 in 2006. Infinitely worse has been India’s short fall in social development. The literacy rate in India is around 65% while it is over 85% in Singapore, Thailand, Malaysia and Philippines. The infant mortality rate in our country is 60 per 1000 live birth as against 32 in Indonesia, 28 in Philippines and 24 in Thailand. A major part of the population does not have access to toilets, clean drinking water and electricity. A National Family Health Survey (III) carried out in 2005-06 showed that 46% of children under 3 years of age and 49% of children over 6 years of age suffered from malnutrition and 79% of children from anemia. In that survey it had been shown that 32% of households did not have electricity, 59% did not have safe drinking water, 55% did not have toilet facility and 59% did not live in pucca houses.

CONCLUSION:

Now, on the basis of above facts we can say that India represents a paradoxical dynamics with its high growth and fast expanding rich and middle class on the one hand and lack of minimum income and other basic facilities for a large chunk of population. Our country has covered a long way but it has a much longer way still remained to cover. It is not being increasingly realised that economic growth alone is not enough, if it does not provide a flow of benefit that is sufficiently widespread. Of course, we need a faster growth because we must expand the productive base of the economy, if we want to provide broad based improvement in the material condition of our people.

But equally important is that the growth process should be much more inclusive, a growth process that raises income of the poor to bring about a much more faster and sustainable reduction in poverty, a growth process which generates expansion in good quality employment opportunities and a growth process which enhances the capabilities of the people through process of skilled based education and efficient health services. Such growth process should ensure security of income to the disabled, sick, the old and the unemployed.

References :

(1) Govt. of India Economic Survey, 2007

(2) NCEUS (2007), Report on the social security for unorganised workers.

(3) Radhakrishna, R. (2007) India Development Report

(4) Anagariya, A.P. (2004), “Growth and Reforms during 1980s, 1990s,” Economic & Political Weekly, Mumbai, June 19.

(5) Planning Commission (Oct. 2006) Approach paper to the 11th Five Year Plan (2007-12) Govt. of India, New Delhi.

(6) Ramesh, Jairam, Regional Growth in India, Disparities.

(7) Bihar Economic Journal (2007)

(8) The Indian Economic Journal, July-Sept.2008, Refelection on Economic Policies in the Post Independence India, V.K.R.V. Rao, (PP 118-136)

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