Economy
Towards real inclusive growth

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PERSPECTIVE

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P. Seralathan

Many countries worldwide keep harping on the concept of inclusive growth and do not forget to include it in their major economic policy documents. In the People's Republic of China, for instance, the government has made the creation of a “harmonious society”, a concept very closely related to inclusive growth, as the top priority in its EleventhFive-Year Plan. In Thailand, growth with equity is one of the elements of its “Sufficiency Philosophy” which underpins the government's development efforts. It is no small matter that even the avowed votaries of free market economy, such as the IMF and the World Bank, advocate inclusive growth.
One-size-fits-all measures
This espousal is in many ways an attempt on the part of the global monetary agencies to atone for the mistakes committed in the past. Instead of evolving individual solutions for countries caught in economic crisis, these agencies in the 1980s and 1990s imposed one-size-fits-all stabilisation measures. In many countries, especially in Africa and Latin America, these measures led to a decline in public investment and increased the volatility of economic growth and employment.
As far as India is concerned, inclusive growth has been dominating the discourse on economic growth and development for quite some time now. This increased focus on inclusive development stems from the realisation that our stellar GDP growth rates have continuously masked rising inequalities.
Dr Manmohan Singh observes in his foreword to the Eleventh Plan document that the “rapid growth achieved in the past several years demonstrates that we have learnt how to bring about growth, but we have yet to achieve comparable success in inclusiveness. Poverty, whether we look at it narrowly in terms of the population below consumption based poverty line or more broadly in terms of population without access to essential services, is definitely declining but the pace of decline is slower than it should be.” Now an attempt is being made to bridge the gap between the two faces of India: A “shining India”, which is competing internationally and benefiting from the forces of globalisation; a “suffering India”, not as well publicised but even more important, has unacceptably wide swatches of its population who are indigent and vulnerable.
Attitudinal change needed
Merging these two faces — one a beacon of hope and other a symbol of despair — is a real challenge and this cannot be achieved only through policymaking. An attitudinal change is needed to bring about a real inclusive growth; India ranks 94th in the Global Hunger Index of 119 countries.
The World Food programme has estimated that 35 per cent of India's population are considered food-insecure, consuming less than 80 per cent of minimum energy requirements. The government should introspect to find out how it reacts to these issues and how it reacts when sometimes the stock markets plummet or the flow of FDI slackens. This introspection would be the first decisive step towards a real inclusive growth.
source;businessline