Inclusive Growth As A Unifying Factor For India

Posted on August 31, 2010 in Business and Economy

By Ashutosh Singh:

Political democracy is an edifice without base in the absence of economic and social democracy. Founding fathers of our Constitution were aware of this fact which can be explained by their laying too much emphasis on removing inequalities which was, and continues to be rampantly existent in out society. Yet, the difference between intent and implementation that was the hallmark of socialist policies followed by India till 1991 turned out to be the vehicle of inequity aggravation. It was during these years that we witnessed abject poverty increasing many folds despite having governments that were committed wholeheartedly to the slogan of “Gareebi Hatao”. It was, in 1991, that we came to realize that the roots of the problem lay in the economic philosophy that we were following and it was high time for us to break the shackles of stagnation. The subsequent decade took us to the path of some of the best things to have happened to India since independence such as the I.T. boom, high growth rate for many years. All these things gave way to a new kind of optimism that created a self-perpetuating and self-justifying universe which, we felt, contained all our questions and answers. This universe was broken into pieces by those people for whom India was as dark as it was shining for some section. The year was 2003 and the person crowned as Prime Minister, who, incidentally, had initiated us into the era of liberalization, was to devise a new term for growth.

26% of the Indian population lives in abject poverty. This population is untouched with any kind of growth sweeping across the nation. Consistent with this conjecture is the dismal condition of women who continues to be at the bottom of all the charts of developmental parameters. One gets reminded of Gandhi in such times who had asked us to gauge the development of a society through the prism of women’s condition. Growth that doesn’t leave these women, tribals, dalits and poor behind falls under the definition of inclusive growth. This definition becomes all the more comprehensive if it involves four attributes that are mentioned below.

1. Opportunity: Is the economy generating more and varied ways for people to earn a living and increase their incomes over time?

2. Capability: Is the economy providing the means for people to create or enhance their capabilities in order to exploit available opportunities?

3. Access: Is the economy providing the means to bring opportunities and capabilities together?

4. Security: Is the economy providing the means for people to protect themselves against a temporary or permanent loss of livelihood?

An economy whose answer is in the affirmative to all the questions each attribute poses can be called truly inclusive. Indian economy is a far cry from that ideal state, for sure. For a country like India which is so very diverse in almost all the senses, be it geography, history or social practices, it becomes all the more important to maintain an equilibrium between various socio-economic-political dimensions and efforts should be made to bridge the gaps existing today. Otherwise, these gaps, if widened beyond a point give way to serious problems that escalate into out-blown proportion. Naxalism is one such problem whose roots lie in continual neglect of tribal population by various governments. Small wonder that huge portion of Maoist army consists of tribals. Point to be taken into regard here is that female participation is huge in the naxalite movement which, as some social scientists suggest, is an outlet to the anger arising out of the oppressive measures taken against them through centuries. Same explanation can be offered for unrest in North-East and Jammu and Kashmir.

It seems as if the government has woken up to the urgency of situation by realizing that growth is not an end in itself but means to an end and growth is necessary but not sufficient. History can teach us a lot about the consequences of living in the utopian world based upon the notion of growth-takes-care-of-everything ideology. Balkan countries were a very prosperous entity before they disintegrated into several pieces giving way to the legendary word more commonly known as balkanization. Same goes for USSR which used to constitute a very powerful block in then existent bipolar world order. If these examples are any indication, then time is ripe for us to take stock of the fact that survival of India lies in catering to the needs of all the sections of the society. Especially the ones who are at the bottom of the pyramid as they are most susceptible to the changes taking place in their surroundings. Ironically, these changes are being caused by factors in which these people have no role to play. They have only brunt to bear.

Thinking of role of state in a radically different manner is inevitable to achieve this inclusive growth. Old concept of all pervasive benevolent government who is always there to help you will only make people handicap. Best way to tackle this issue is to have an enabling government that seeks to create an environment where individual’s entrepreneurial skills get unleashed. Government is expected to play the role of an honest referee. Benefits reaped through this process has to be percolated downwards to the bottom most strata by providing them with basic education and health sector. NREGS (now MANREGS – Mahatma Gandhi National Rural Employment Guarantee Scheme) is the most glaring example of this way of looking at things. Such schemes, if effected efficiently can work wonders for Indian democracy that fats and feeds on inclusiveness.

Two words that define the modern notion of development are inclusiveness and sustainability. No debate about development can be complete without talking of these two factors but for this growth to be sustainable, it has to have a balance between herself and inclusion. Such kind of growth focuses on ex-ante analysis of sources of, and constraints to sustained, high growth and not only one group-the poor. This calls for devising innovative ways to increase the pace of growth through using portion of labor force trapped in low productivity activities or that lives in the island of exclusion from all kind of growth. Sustained, high growth rates and poverty reduction, however, can be realized only when the sources of growth are expanding, and an increasing share of the labor force is included in the growth process in an efficient way. Moreover, we need to keep in mind that asset inequality rather than income inequality may matter for growth outcomes.

This brings us to the question of idea of justice and growth. What moves us, reasonably enough, is not the realization that world falls short of being completely just-which few of expect-but that there are clearly remedial injustices around us which we want to eliminate (Sen,Amartya 2008,The idea of Justice). This injustice is heartrendingly manifested in the eyes of victims of Bhopal gas tragedy, finds enough expression in the cracking voice of inhabitants of Sunderbans who are forced to leave that place because of global warming-a product of merciless growth with no human face. Most important of all human values, compassion can be hardwired into the DNA of an economy by thinking along the planes of growth that cares for all stakeholders and not the chosen few that would mean justice for all and would make this world a far better place.


Kujur, Rajat Kumar,(2008),

Gokarm, Subir (2007),

Basu, Dr.Kaushik (2008), Ministry of Finance

The writer is a Correspondent of Youth Ki Awaaz and a student of IIM Kozhikode.

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