India’s Pursuit of Inclusive Growth | PWOnlyIAS 2023

Context: This article is based on an Editorial “The G20 envisions a big role for technology in inclusive growth” which was published in LiveMint. The Indian G20 presidency has placed inclusivity at the forefront of its agenda, seeking to amplify public concerns within high-level discussions.

About Inclusive Growth:

• • Inclusive growth is economic growth that is distributed fairly across society and creates opportunities for all.
  • Pillars of inclusive growth include Wellbeing, Inclusivity, Sustainability and Equity. (WISE)

• Reducing Income Inequality: It seeks to reduce income inequality by narrowing the income gap between the rich and the poor. This can be achieved through progressive taxation, social safety nets, and policies that promote fair wages.
• Environmental Sustainability: Inclusive growth takes into account environmental sustainability, ensuring that economic development does not come at the cost of environmental degradation, and that future generations can also benefit from growth.

Elements of Inclusive Growth & G-20 Initiatives:

• Skill Development: Harnessing the demographic dividend will depend upon the employability of the working age population, their health, education, vocational training and skills.
• G20 Global Partnership for Financial Inclusion (GPFI): GPFI serves as a forum for G20 nations, non-G20 countries, and relevant stakeholders to advance initiatives related to financial inclusion, including the execution of the Financial Inclusion Action Plan
  • Financial Inclusion: The G20 Global Partnership for Financial Inclusion (GPFI) report prepared by the World Bank highlights that the JAM (Jan Dhan, Aadhaar, and Mobile) trinity has been instrumental in increasing the financial inclusion rate from 25 per cent in 2008 to over 80 per cent of adults in the past six years.
• Technological Advancement through inclusive growth: The continuous improvement and innovation in technology, leading to the development of new products, services, and processes that enhance productivity, efficiency, and quality of life.
  • The G20 endorsed both the voluntary G20 Framework for Digital Public Infrastructure Systems and India’s proposal to establish a Global Digital Public Infrastructure Repository. 
• Economic Growth: Economic growth can favor inclusive growth when it is structured and managed in a way that ensures the benefits are broadly shared among different segments of population by creating jobs, reducing poverty and inequality.
  • The G-20 Declaration established the importance of startups and SMEs as key engines of sustainable economic growth and innovation. The G20, for the first time, had a dedicated Startup20 summit under India’s Presidency.

Challenges in Achieving Inclusive Growth:

• Unemployment: As per the Periodic Labour Force Survey (PLFS) of NSSO, the unemployment rate among the urban workforce was 7.8%, while the unemployment rate for the rural workforce was 5.3% totaling the total unemployment rate at 6.1%.
• Agriculture Backwardness: 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 and impacts the goal of inclusive growth.
• Regional Disparities:  Factors like the caste system, gap between rich and poor etc. contribute to the regional disparities which create a system where some specific groups hold more privileges over others.
• Poverty: As per the Multidimensional Poverty Index (MPI) 2018, India lifted 271 million people between 2005-06 and 2015-16, with the poorest regions, groups, and children, reducing poverty fastest. Still, despite the massive gains, 373 million Indians continue to experience acute deprivations.

Government Initiatives to Promote Inclusive Growth:

• Mahatma Gandhi National Rural Employment Guarantee Act Scheme (MGNREGA)
• Prime Minister’s Employment Generation Programme (PMEGP)
• Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
• Deendayal Antyodaya Yojana- National Urban Livelihoods Mission (DAY-NULM)
• Sarva Siksha Abhiyan (SSA)

Empowering India: A Positive Path Forward for Inclusive Growth

• Investment in Human Capital & Physical Infrastructure:  It is the most important way by which countries can durably lift their rate of productivity growth.
• Skill Development: The best way to achieve inclusive growth is through developing people’s skills.
• Education: The working of existing government schools should be improved as a matter of priority. There is also a need to expand and modernize teacher-training facilities.
• Focus on Poverty Reduction: The Indian government along with the state governments and local governments should continue to focus on eradicating poverty and achieving sustainable development in order to improve the lives of India’s people and achieve inclusive growth.

Conclusion 

• Inclusive growth means everyone benefits from the country’s progress. India aims to achieve this by improving skills, education, and reducing poverty. Challenges like unemployment, regional disparities, and poverty still exist. To succeed, India must invest in people, education, and keep fighting poverty together with state and local governments