Inclusive Growth: A Challenging Opportunity

Inclusive growth means the pace as well as the pattern of the economic growth. Either pace or pattern alone cannot portray itself as inclusive growth. Inclusive growth is a loud call and need of the hour. In our hurriedly growing economy, mid way point we’ve realised that, are the economic paybacks shared equally? Does everyone have equal access to them?

Here comes the challenging opportunity, for the government, businessmen, service sector and broadly every citizen. The dare of creating ample amount of opportunities to the poor, backward class and for the population which is fighting to get electricity, struggling for access to water, one who needs to travel 100 km to see the doctor if he/she gets sick. It is to be noted that in developing economies, more than half of the total work force of 2.6 billion is employed in the informal sector (in India the population is 92% of workforce) with unfavourable working condition. Unemployment especially in youths is in the range of 40 % to 70%, with close to 1 billion people suffering from malnutrition, 2.7 billion people not having access to proper sanitation and clean drinking water, around 125 million children not going to school. The above does clearly indicate that a certain section of society have been deprived of the opportunities in sharing the fruit of growth.

Growth is important, but higher economic growth rate does not, by themselves bring inclusiveness or reducing inequalities. This is something to be noted by the policy makers. The current plan is to increase spending on health care, education, skill development, and infrastructure which is something which leads to inclusive growth. The challenge for govt. is that, whether they are able to prevent leakages of their investments or not. Certainly and sadly though they are unable to prevent leakages of funds, which in return is dismantling the whole structure of policies and expected outcomes. The goals set by MDG’s for 2015, which will provide inclusive growth is off track. All the goals are lagging behind which surely indicates the lacklustre delivery system.

It is for the private sector as well to look for inclusive growth. It will widen their market. Producing cost effective products will lead to expansion of sales. There were only 5.07 million telephone users in 1991, and today in 2011 the no. of mobile phone subscribers are 851.70 million. It is for the simple fact that a mobile phone is available at as cheap as RS 700. It has empowered a large section of society, infused communication for all and has increased connectivity. Many more products like mobile phones are required. There is a huge market. Moving on to a contrasting example, only 38% of scheduled commercial banks are located in rural areas and only 40% of the total population in country has bank accounts. Private sector needs to come up with new innovative ideas which are a huge opportunity for them.

India must look at some alarming indicators. Agriculture in India employs 57% of the total population which in turn contributes to only 16% of the total GDP. Problems of agricultural sector must be seriously addressed in order to attain inclusive growth. Agricultural sector is acutely suffering from land and water management, research and technology deficit, market deficit, skill deficit and so on. The solutions to these problems will benefit the 57% workforce which is visibly a huge section of society in India.

 Health and education delivery system needs to be strengthened to fight regional, social and gender disparities. It will initiate spending on health and education.

Regional disparities must be taken into consideration, Punjab boasts of per capita income of RS 16,679 where as Bihar has per capita income of RS 3557. Regional development policies need to be implemented with an efficient workforce to reduce the gap.

Rapid degradation of land, water and other natural resources must draw an effortless attention; it will require a change in consumption pattern from each level i.e. personal and public.

Inclusive growth is a challenge which needs to be faced now, ignoring it can be fatal. Inclusive growth does not necessarily lead to slowing down economic growth but what inclusive growth demands is strengthening of our socio, economic and political system for better distribution of our achievements. Wide disparities are definitely a challenge to deal with, at the same time it is an opportunity for everyone to tackle with the challenge and turn it to gold dust.

Please visit this link, AIMA summit on the above topic in New Delhi  http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2011/09/29&PageLabel=11&ForceGif=true&EntityId=Ar01100&ViewMode=HTML