• UGI USER
  • Mar 19, 2024
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INCKUSIVE GROWTH IN INDIA KEY TO VIKSIT BHARAT

Syllabus:

GS 2:

  • Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Focus:

  • India has highest GDP growth in all of G20 countries.
Source:- TOI

Overview of India’s Economic Resilience and Growth

India is witnessing a significant period of economic resilience and growth, underpinned by several key factors:

  • Political and Economic Stability: The democratic political system, stable governance, liberalized economy, and demographic advantages are pivotal.
  • Infrastructure and Financial Sector: Enhancements in infrastructure and a robust financial sector with effective regulators are contributing to the growth.
  • Global Confidence: Despite credit rating agencies’ hesitance to upgrade India’s sovereign rating, there’s an upward revision in growth forecasts by Moody’s and Fitch.

Economic Growth and Global Standing

  • Growth Trajectory: India is on the path to become the third-largest economy within 48-54 months, targeting a $10 trillion economy by 2035.
  • Credit Rating and Economic Indicators: Despite being rated BBB-, India showcases strong economic indicators such as a minor current account deficit, a credible fiscal roadmap, and the 5th largest GDP.
  • Real GDP Growth: India has experienced over 8% real GDP growth in the first three quarters of FY2024, the highest among G20 nations.

Discrepancy between GDP and Human Development

  • GDP vs. GVA: The difference between GDP and Gross Value Added (GVA) highlights a discrepancy due to indirect tax collections and reduced subsidy spending.
  • Sectoral Growth: Agriculture, industry, and services show varied growth rates, with a notable slowdown in agriculture, raising concerns over overall economic momentum.

Addressing Growth and Development

  • Capital and Credit Flow: For sustained growth, adequate capital availability and smooth credit flow are essential, especially with a focus on increasing private capital expenditure (capex).
  • Financial Ecosystem and Policy Interventions: Diversification of the financial ecosystem and policy reforms are necessary to utilize the Non-Banking Financial Companies (NBFCs) sector more effectively.

Towards Inclusive Growth

  • Development Goals: Economic growth must be paired with advancements in health, nutrition, education, and other Sustainable Development Goals (SDGs) to ensure inclusive development.
  • Aspirational Districts Initiative: Investments in the Aspirational Districts are crucial to translating high economic growth into meaningful human development.
India’s “Vision Viksit Bharat @2047″ aims to transform the nation into a developed country by the year 2047, marking the 100th anniversary of its independence. This vision encompasses a broad range of goals and initiatives focusing on sustainable development, inclusive growth, and technological advancement. Key points of India’s vision include:

  • Economic Growth: Achieving a high rate of economic growth to become one of the world’s largest economies, with a focus on sustainable practices and equitable distribution of wealth.
  • Infrastructure Development: Building world-class infrastructure across the country, including transportation, digital connectivity, and urban and rural development, to support economic growth and improve quality of life.
  • Technological Advancements: Harnessing the power of technology and innovation to drive productivity, efficiency, and sustainability across all sectors of the economy.
  • Healthcare for All: Ensuring access to affordable and quality healthcare services for every citizen, aiming for a healthy and productive population.
  • Education and Skill Development: Investing in education and skill development to create a knowledgeable and skilled workforce capable of meeting the demands of a modern economy.
  • Environmental Sustainability: Committing to environmental sustainability and climate change mitigation efforts to preserve natural resources for future generations.
  • Social Inclusion: Promoting social inclusion and reducing disparities by focusing on the upliftment of underprivileged and marginalized sections of society.
  • Agricultural Transformation: Modernizing agriculture to increase productivity, ensure food security, and improve the livelihoods of farmers.
  • Energy Security: Achieving energy security and promoting the use of renewable energy sources to reduce dependence on fossil fuels.

Why Inclusive Growth Matters for India’s Future Development:

  • Accessibility to Core Public Services:
    • Severe lack of accessibility to essential public services.
    • Public spending on core services remains low (1 – 2% of GDP).
    • Uneven quality of institutions exacerbates the issue.
  • Malnutrition and Undernourishment:
    • Prevalent among marginalized sections, particularly adolescent girls.
  • Economic and Social Inequalities:
    • Intra-state and inter-state disparities persist.
    • Lagging states face poor growth rates and public services.
  • Sectoral and Regional Disparities:
    • Challenges include low agriculture growth, poor quality employment, rural-urban divides, and gender inequalities.
    • Uneven growth across sectors and regions, with neglected policies in agriculture.
  • Aim of Inclusive Growth:
    • Reducing poverty, inequality, and fostering economic growth.
  • Labor Market Dynamics:
    • Labor laws often favor informal employment, leading to ‘casualization’ of labor.
    • Skilled labor demanded due to trade competitiveness and technological advancements.
  • Unsustainable Growth:
    • Risks associated with unsustainable economic growth.

Essential Elements of Inclusive Growth in India:

  • Skill Development:
    • Addressing the dual challenge of a lack of highly trained workforce and non-employment of conventionally trained youths.
    • Emphasis on vocational training and skill development.
  • Financial Inclusion:
    • Ensuring access to financial services for vulnerable groups.
    • Cultivating a culture of saving to stimulate economic development.
  • Technological Advancement:
    • Leveraging initiatives like the Digital India Mission for inclusive growth.
    • Technology can either decrease or increase inequality depending on its application.
  • Economic Growth:
    • Targeting a $5 trillion economy by 2024-25 to reduce inequality and boost social expenditure.
    • Addressing cyclic and structural challenges for sustainable growth.
  • Social Development:
    • Empowering marginalized sections through improved social institutions.
    • Investments in healthcare, education, and social structures to create a healthy and capable workforce.
Measurement of Inclusive Growth

Inclusive Development Index (IDI)

  • Compiled by the World Economic Forum (WEF), the Inclusive Development Index (IDI) focuses on assessing a country’s growth beyond GDP, emphasizing people’s standard of living.
  • IDI measures inequality through three parameters: Growth and development, Inclusion, and Inter-generational equity and sustainability.

Social Progress Index (SPI)

  • SPI is an aggregate index of social and environmental indicators, encompassing Basic human needs, Foundation of well-being, and Opportunities.
  • Unlike solely focusing on expenditure, SPI evaluates government outcomes and the efficiency of spending, offering a more comprehensive assessment of societal progress.

Global Slavery Index

  • Released by the Walk Free Foundation of Australia, the Global Slavery Index highlights modern slavery, where one person exploits another’s freedom and controls their body.
  • Factors contributing to modern slavery include the absence of rights, lack of physical safety, inadequate access to necessities like healthcare and education, and migration patterns.
Initiatives for Inclusive Growth: Schemes Driving India’s Progress

Financial Inclusion:

  • Pradhan Mantri Jan Dhan Yojana
  • Pradhan Mantri Jeevan Jyoti Beema Yojana
  • Pradhan Mantri Suraksha Bima Yojana
  • Atal Pension Yojana
  • Pradhan Mantri Mudra Yojana
  • Jan Dhan, Aadhaar, and Mobile (JAM Trinity)

Employment and Inclusive Growth:

  • MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)
  • Skill Training for Employment Promotion amongst Urban Poor (STEP-UP)
  • Swaran Jayanti Shahari Rozgar Yojna

Agriculture and Inclusive Growth:

  • Pradhan Mantri Krishi Sinchayee Yojana
  • National Agriculture Market
  • National Food Security Act

Technology and Inclusive Growth:

  • Digital India Program

Skill Development and Inclusive Growth:

  • National Skill Development Mission
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
  • Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
  • Pradhan Mantri Vidya Lakshmi Karyakram
  • Self-Employment and Talent Utilization (SETU) Mechanism
  • Atal Innovation Mission (AIM)

Source:

The New Indian Express

Mains Practice Question:

“Discuss the strategic initiatives and challenges associated with India’s Vision Viksit Bharat @2047. Evaluate the role of governance, technology, and socio-economic policies in achieving this vision. How can India balance its economic ambitions with environmental sustainability and social inclusion to ensure a holistic development by 2047?”