Every economy needs to increase output to grow. And to produce more, more demand is required. To have a sustainable demand in the economy, the people should also have a sustainable source of income.
In India, more than 60% of the population depends upon the primary sector, but it contributes the least to the country’s total GDP. And the growth of the primary sector was underperforming the total growth, thus most people are yet to benefit from the growth of the Indian Economy.
Inclusive growth advocates for more equitable distribution of the gains made by the higher growth. Another perspective is to make the mass part of the growth process.
Currently, most of the population depends on the agriculture sector. but the agriculture sector itself is not good enough to employ all the people. The manufacturing sector can support a huge chunk of the labour force, but the manufacturing sector in India is yet to mature. So investing more capital and political will in the manufacturing sector, can employ more people and increase the purchasing power of the people.
If the increasing demand goes beyond the supply, inflation will eat all the benefits of the growth. So the lower section of the society must have increased purchasing power along with affordable basic necessities. The core concept is to provide improved living conditions and “well-beingness”.
Way ahead to achieve inclusive growth:
Inclusive growth should lead to:
Employment opportunities for the mass at the entry level, providing livelihood, means of income, increasing their purchasing power and improving their “well-beingness”. This should result in reducing absolute poverty levels.
Reduction of inter-/inra-region imbalances.
Create opportunities for skill development/formation.
Better dispersal of industries.
Increased agro-based industries.
A gradual shift away from the excessive economic dependence on the agricultural sector through employment-driven and positive migration.
Increased vocational employment.
Way ahead to achieve inclusive growth:
More viable and cheap transport infrastructure both for people and goods
Improved public services(health care and education) and public utilities.
Re-energizing the Industrial Training Institutes (ITIs) for skill development.
Policy framework for attracting more investments by the private sector
Considering more employment creation programmes (such as MNREGA) instead of direct cash subsidies and allowances.