Inclusive Growth

Mains Marks Booster     5th August 2023        
Samadhaan

The former President of India, Pranab Mukherjee once said, “Inclusive growth should not be a mere slogan but a fundamental driving force for sustainable development.”

Definition

  • The United Nations Development Program (UNDP) defines inclusive growth as “the process and result of all groups of people participating in the organization of growth and benefiting equally from it.”
  • SDG 10 focuses on ensuring equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard.

Inclusive Growth through Five-year Plans:

  • The Eleventh five year Plan (2007-12) in India for the first time gave importance to Inclusive growth.
  • The Twelfth Five-year plan (2012-2017) was launched with the slogan “Faster, More Sustainable, and More Inclusive Growth.” 
  • The plan observed Inclusive growth should result in lower incidence of poverty, broad-based and significant improvement in health outcomes, universal access for children to school, increased access to higher education and improved standards of education, including skill development.
  • It should also be reflected in better opportunities for both wage employment and livelihood, and in improvement in provision of basic amenities like water, electricity, roads, sanitation and housing. 

Elements of Inclusive Growth: Skill development, Empowerment of vulnerable sections, Economic growth, financial inclusion, technology advancement.

Need for Inclusive growth in India:

Need for Inclusive growth in India

Government Initiative to achieve Inclusive Growth in India 

  • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA),  Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Ujjwala Yojana (PMUY).
  • Pradhan Mantri Awas Yojana (PMAY): This housing scheme aims to provide affordable housing to urban and rural poor, with a focus on economically weaker sections and low-income groups.
  • Skill India Mission: skill training and entrepreneurship development programs to bridge the skill gap and promote job creation.
  • Digital India: This program aims to transform India into a digitally empowered society and knowledge economy by promoting digital infrastructure, digital literacy, and digital services accessible to all citizens.
  • Beti Bachao, Beti Padhao: This campaign seeks to address gender discrimination and promote the education and welfare of the girl child, with a focus on improving the sex ratio and enhancing girl's access to education.
  • Swachh Bharat Abhiyan: This nationwide cleanliness campaign focuses on improving sanitation, constructing toilets, and promoting hygiene practices to enhance health outcomes and quality of life.
  • Start-up India: This initiative aims to promote entrepreneurship and innovation by providing support, funding, and incentives to start-ups, facilitating job creation and economic growth.
  • Pradhan Mantri Kisan Samman Nidhi (PM-KISAN): This income support scheme provides direct cash transfers to farmers to ensure a minimum income and address agricultural distress.
  • Atmanirbhar Bharat Abhiyaan 

Challenges in achieving inclusive growth in India

  • Service Sector Dominance,  Social Divisions, Unequal Access to Education and Skills, Rural-Urban Disparities, Informal Sector Challenges, Governance and Corruption

Way Forward

  • Enhancing education and skills, Promoting financial inclusion, Implementing targeted social welfare programs, Addressing gender inequality, Investing in rural development and agriculture, Strengthening governance and accountability and Encouraging public-private partnerships.

 

Atmanirbhar Bharat Abhiyaan 

Context

Atmanirbhar Bharat Abhiyaan or self-reliant India campaign is the vision of new India envisaged by the Prime Minister to move towards a self-reliant India. 

Objective of Atmanirbhar Bharat Abhiyaan

Objective of Atmanirbhar Bharat Abhiyaan

Way Forward 

  • Long-term strategy: Develop a regional supply chain-focused approach to ensure future success.
  • Openness to free and fair trade: Attract investors based on strengths rather than tariffs, promoting international business investment in India.
  • Support for innovation: Foster STEM skills and an innovator-friendly IP regime to drive problem-solving and economic growth.
  • Embrace digital and data opportunities: Integrate with major markets, invest in AI and digital tech for economic advancement.
  • Prioritize sustainability Incorporate sustainability and human rights into trade agreements for environmental protection and poverty alleviation.
  • Stimulate demand through infrastructure spending:Invest in greenfield infrastructure to enhance productivity and benefit daily wage laborers.
         Bharat Abhiyan

 

Global Economic Recession

Context-

Recently IMF Chief Kristalina Georgieva in an interview mentioned that around one-third of the global economy will face a recession in 2023, leading to a slowdown in economic growth compared to previous years. Major economies worldwide are experiencing a decline in growth, contributing to this trend.

Is the world heading towards a global recession? Various viewpoints: 

  • World Economic League Table - Global economy topped $100 trillion for the first time in 2022 but will halt in 2023.
  • Bloomberg - More than a 1/3 of the world’s economies will collapse (25% possibility that in 2023).
  • World Bank - Global economic growth to be 1.7% in 2023 and 2.7% in 2024.
  • World Economic Outlook, 2023 - Advanced economies are expected to see a growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023.

Reasons behind current Global Economic Recession 

  • China Factor: Zero covid policy, crisis of housing market, evolution of especially contagious SARS-CoV-2 etc. Dependency on China for global supply value chain may cause global economic recession.
  • European crisis: EU and Eurozone countries are heading towards a slowdown in the economy. Increasing inflation brought the citizens to protest. 
  • American Dilemma: US Federal Reserve has raised its benchmark overnight interest rate to the 5.00%-5.25% range. This signalled that the economy might fall into recession.
  • Russia – Ukraine War disrupted global supply chain, pushing towards global recession.

Way Forward 

  • Fiscal Stimulus Packages: Increased government spending, tax cuts, or subsidies to stimulate demand and investment to increase consumer spending and encourage businesses to invest. 
  • Monetary Policy Measures: Reducing the key interest rates, easing borrowing conditions, and injecting liquidity into the banking system to encourage lending and investment.
  • Bank Recapitalization: To ensure that banks have sufficient capital to lend and support economic growth.
  • Infrastructure Development: Investments in infrastructure projects to create spill over impacts on the employment sector, reviving growth long-term positive impact on economic growth. 
  • Multilateral cooperation - on areas of common interest like strengthening global value chains, improving resilience, easing price pressures, addressing climate change challenge. 

 

Concept of Green Growth

The Ministry of Finance has outlined key priorities for promoting green growth in its budget submission for the fiscal year 2022-2023.

Green Growth

  • It refers to a framework for economic development that promotes sustainable and environmentally friendly practices.
  • It recognizes the interdependence between economic growth, environmental protection, and social well-being to achieve economic prosperity while ensuring the long-term sustainability of natural resources, reducing environmental degradation, and mitigating climate change.

Principles and challenges of Green Growth:

Principles challenges
Government Initiatives for Green Growth 

  • Green Hydrogen Mission: Aims to transition the economy to low carbon intensity.It will help to reduce dependence on fossil fuel imports.
  • Green Credit Programme: The 'green credit programme' under the Environment (Protection) Act will incentivize environmentally sustainable and responsive actions by companies, individuals and local bodies.
  • PM-PRANAM: A new “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth”. It will incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.
  • Gobardhan scheme: GOBARdhan supports the villages in safely managing their cattle waste, agriculture waste and organic waste in Rural areas. It also helps villages convert their waste to wealth, improve environmental sanitation and curb vector borne diseases

Conclusion 

Green growth can help governments, businesses, and communities thrive while reducing environmental impact. It involves balancing economic growth, environmental sustainability, and social well-being. We do so to build a resilient, sustainable, and beneficial future.

Samadhaan