Inclusive Growth-- short essay for SBI PO

1.      (a) Inclusive Growth

Inclusive growth has become the buzzword in policy spheres with the recent phenomenon of rapid growth with characteristic pattern of exclusion. Due to faulty approaches and often politically motivated policies, growth has generated inequalities. It is imperative for the planners and policy-makers to make growth inclusive through adoption of pragmatic policies.

            Despite all the attention in inclusive growth has received in the last few years that lacks a precise and agreed-upon definition of the term. Overall, the literature is divided between two concepts; (i) whether the benefits reach the poor and (ii) whether the benefits reach the poor proportionately more than it reaches the non-poor. By the first definition, India may have performed quiet remarkable in the last two decades although the magnitude is hotly debated. By the second definition, India’s performance against inclusive growth seems more lacklusture. Gini coefficient, a measure of income inequality, indicates that income inequality in India has increased both at an overall level as well as in almost all of the states both for urban and rural areas.

            To address these challenges going forward, evidence suggests that there are a number of macro and micro level interventions that are poverty reducing - and thus conducive to inclusive growth. At macro level, there is little doubt about the usefulness of Washington consensus. At micro level, evidence suggests that improving the factors such as poverty reduction, reduction of inequality, access to public infrastructure and women empowerment will help in accelerating India’s chances in achieving the target of prosperity and social quality via inclusive growth.