Inclusive Growth?

I Satya Sundaram

The fruits of economic development should reach all sections of the population, and all regions of the country. This is inclusive growth. India's five year plans aimed at achieving this laudable objective. Yet, inequalities in income and wealth are on the rise. There is no balanced regional development.

The World Economic Forum (WEF) has recently observed that India is low on inclusive growth. It has ranked India globally towards the lower end on most of the parameters indicative of inclusive growth and development. Of course, the country fared much better on the scale of business and political ethics.

India has mostly been ranked in the bottom half of the 38 countries that make up the lower middle income bracket, in the first such global rankings issued by the Switzerland-based think-tank.

The dismal performance of India relates to fiscal transfers, where it ranks 37 out of 38, on 'tax code' at 32nd and 36th on social protection.

Considering current growth pattern in India, the WEF said that India need to focus on "asset building and entrepreneurship" especially in the sphere of "small business ownership" where India ranks at the bottom at 38th place.

The WEF has thus indirectly hinted at the dangers of jobless growth.

WEF is satisfied with India's leadership in areas like corruption and rents where it comes 8th. Regarding business and political ethics, it ranks 12th. It ranks 11th on the "Financial intermediation of real economy investment pillar" which means money invested is generally productively used.

The WEF regretted that most countries, including India, missed major opportunities to reduce income inequality. The Forum rightly believes that both economic growth and equity can be simultaneously achieved through concerted efforts.

Frontier
Vol. 48, No. 20, Nov 22 - 28, 2015