Inclusive growth aligns with the principles of social and economic justice enshrined in the Indian Constitution’s Preamble and Directive Principles of State Policy. It emphasises ensuring that the benefits of economic growth reach all sections of society, especially the poor, women, youth and marginalised communities. Inclusive growth can promote economic expansion that reduces poverty and generates diverse employment opportunities.
Let’s briefly discuss inclusive economic development, its objectives, pillars, factors that affect it, and measures to achieve it.
Understanding ‘Inclusive Growth’ Meaning
According to the United Nations Development Programme (UNDP) framework, inclusive growth is the process by which all groups of people participate in the organisation of growth and benefit equitably from it.
The simple meaning of inclusive growth is that economic growth benefits all sections of society within nations. This growth ensures that even the poorest and most marginalised sections of society share meaningfully in economic gains. A society is said to have achieved inclusive economic growth if it benefits all the members of the nation in the best possible means of subsistence and employment.
The Organisation for Economic Co-operation and Development (OECD) framework for policy action on inclusive growth, 2018, defines inclusive growth as economic growth that offers opportunities and benefits to everyone and is distributed fairly across society.
Objectives of Inclusive Growth
There are several objectives of inclusive economic development that benefit everyone in the society.
- It aims to reduce both absolute and relative poverty across rural and urban areas.
- Income and wealth equalisation to narrow the gap between the rich and the poor, creating a more equal society.
- Inclusive growth’s primary objective is to create adequate employment opportunities across sectors and geographies to provide dignified livelihoods.
- It focuses on improving health outcomes, literacy rates, skill levels, and overall human capital.
- Reducing the imbalance between developed and underdeveloped regions and states.
- Ensuring easy access to basic services, including healthcare, education, sanitation, water, and electricity.
- Women and youth empowerment provide equal opportunities to both so that they can participate in economic and social life.
Pillars of Inclusive Growth
Ever wondered where these pillars of inclusive growth came from? The Government of India, under NITI Aayog, developed a unique context-specific model of inclusive growth called the ‘Bharatiya Model’ or ‘Sabka Vikas‘, built on three pillars. This unique model is created on three strong pillars that work together to build an inclusive, sustainable economy.
Pillar 1: Market Economy
- This pillar states that private enterprise, competition, and entrepreneurship are the primary drivers of growth and job opportunities.
- The government focuses on reducing bureaucratic overreach through its “Minimum Government Maximum Governance” approach to improve service delivery.
- Key initiatives for inclusive economic development include infrastructure development through Public-Private Partnership (PPP) and digital infrastructure such as Aadhaar, UPI, and open data platforms.
- Also, supporting MSMEs and startups with access to credit and skills development, alongside trade liberalisation and the attraction of foreign investment.
Pillar 2: Antyodaya and Empowerment
- This pillar emphasises pushing the most vulnerable sections of society to reach their full potential. This idea comes from Antyodaya, which means ‘upliftment of the last person’, prioritising the welfare of the most marginalised.
- Providing welfare support through cash transfers and in-kind benefits across healthcare, education, housing, food security, and clean energy for the poor section of society to achieve inclusive economic growth.
- Promoting women and youth empowerment programs, gender equality initiatives, and protection of vulnerable groups and social safety nets during emergencies and natural disasters.
- Community participation in local governance through Gram Sabhas and panchayats.
Pillar 3: Holistic and Pragmatic Approach
- This pillar focuses on the fact that economic decisions must be based on real evidence, ground experience, and India’s unique context, not on foreign models.
- A coordinated approach between fiscal policy and the RBI’s monetary policy aims to balance inflation control with conditions conducive to inclusive growth.
- It emphasises macroeconomic stability, such as low inflation, a strong currency, and fiscal discipline, as well as green economy policies, such as the National Action Plan on Climate Change and the PM Surya Ghar scheme, to promote sustainable development.
- Pragmatic policies are designed to incorporate feedback for continuous improvement to achieve inclusive economic development.
- Integration of all government programs to achieve greater impact and maximise coordination between government agencies and departments.
Factors Affecting Inclusive Growth
Here are the structural and systemic factors that continue to challenge inclusive growth despite notable progress.
1. Income and Wealth Inequality
Unequal distribution of wealth limits economic opportunities for ordinary people. As a result, the majority of the poor remain poor. If wealth and income are distributed properly, there will be more opportunities for poor people.
2. Unemployment and Informal Workforce
More than 90% of India’s workforce is employed in the informal sector (ILO), lacking job security, social protection, or access to formal financial services, which keeps them in poverty and prevents them from fully participating in the economy.
3. Gender Inequality
Social discrimination and safety issues prevent women from fully participating in formal employment, excluding half of the population from meaningful participation in inclusive growth.
4. Rural and Urban Divide
Many rural areas lack basic infrastructure such as electricity, healthcare, and education, creating major regional imbalances and driving distress migration to cities. This situation creates a rural-urban divide that prevents people from participating in inclusive economic growth.
5. Education and Skill Deficit
There is a wide educational gap between regions and communities, combined with high dropout rates and skill mismatches, which prevent youth from accessing better opportunities.
6. Implementation Gaps
As documented in CAG audits and Economic Survey assessments, weak monitoring and poor implementation prevent welfare schemes from delivering intended benefits and exclude marginalised communities.
Measures Taken for Inclusive Growth
The government of India is taking several important measures to promote inclusive growth. These include the following:
- Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
- Prime Minister’s Employment Generation Programme (PMEGP)
- Pradhan Mantri MUDRA Yojana (PMMY)
- Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
- Deendayal Antyodaya Yojana National Urban Livelihoods Mission (DAY-NULM)
- Samagra Shiksha Abhiyan (which subsumed Sarva Shiksha Abhiyan in 2018)
- National Health Mission (NHM)
- Bharat Nirman
- Swachh Bharat Mission
- Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB PM-JAY)
- Pradhan Mantri Jan Dhan Yojana
Less Disparity, More Equality
Have you ever thought about how a nation becomes strong and developed? A nation that narrows the wealth distribution gap between the rich and the poor can provide equal opportunities for both. This step significantly reduces poverty and the urban-rural divide.
A nation ensures access to basic needs of its society across healthcare, housing, food security, education, clean water, and energy, which lays the foundation for human development and long-term stability. At the same time, it creates employment opportunities and empowers women and youth to participate more in such endeavours.
Overall, a nation actively working to reduce inequality, expand opportunity, and ensure basic welfare for all is on the path to inclusive growth, a model where prosperity is shared, not concentrated.
