Mains Practice Questions

Introduction

India’s economy grew by 7.2% in FY23, yet income and wealth inequality persist. According to Credit Suisse, the top 1% owns 53% of the national wealth. While economic growth has been impressive, inclusive development—ensuring equal opportunities and access to resources for all sections of society—remains a challenge.

Body

Key Structural Challenges Hindering Inclusive Growth:

• Persistent Poverty and Inequality:
  • The richest 1% control 53% of India’s wealth, while the bottom 50% hold just 4.1% (Credit Suisse Report).
  • High income disparity limits social mobility and economic inclusivity.
• Large Informal Workforce and Unemployment:
  • 90% of India's workforce is informal, lacking job security, social protection, and fair wages (ILO).
  • Unemployment rate remains high, especially among youth and women, with underemployment being a major issue.
• Regional Disparities:
  • Significant economic gaps between states (e.g., Bihar’s per capita GSDP is 1/5th of Maharashtra's).
  • Unequal infrastructure development leads to uneven access to opportunities.
• Gender Inequality in Workforce Participation:
  • 81.8% of women work in the informal economy (ILO).
  • Labour income disparity – men earn 82%, while women earn only 18% (World Inequality Report, 2022).
  • India ranked 135^th out of 146 countries in the Global Gender Gap Index (2022).
• Low Financial Literacy and Digital Divide:
  • Only 27% of India’s population is financially literate, affecting their ability to access credit and savings.
  • Limited digital infrastructure in rural areas restricts access to banking and welfare schemes.
• Gaps in Social Infrastructure (Health & Education):
  • Human Development Index (2023) – India ranked 134th out of 193 countries.
  • Insufficient healthcare facilities, especially in rural areas.
  • Learning outcomes in schools remain poor, affecting long-term economic mobility.
• Inadequate Infrastructure and Basic Services:
  • A quarter of India’s population lacks access to electricity.
  • Poor rural connectivity, housing, and sanitation widen the urban-rural divide.

Policy Measures to Bridge the Gap:

• Employment Creation and Workforce Formalization:
  • Boost MSMEs (e.g., PMEGP) and expand skilling programs (e.g., PMKVY) to improve job opportunities.
  • Implement Labour Codes effectively to bring informal workers into the formal sector.
• Strengthening Social Security and Welfare Schemes:
  • Universalize social security through schemes like PMSYM (Pension) and Ayushman Bharat (Healthcare).
  • Strengthen MGNREGA by increasing wage rates and workdays to support rural employment.
• Financial and Digital Inclusion:
  • Expand digital banking and credit access through JAM Trinity, RuPay, and UPI.
  • Enhance financial literacy programs to empower marginalized communities.
• Reducing Regional Disparities:
  • Invest in infrastructure in backward states to improve connectivity and economic activity.
  • Targeted development programs for lagging regions, focusing on industries and services.
  • The World Bank estimates a 10% increase in broadband penetration can boost GDP growth by 1.38%.
• Improving Education and Healthcare:
  • Strengthen school education initiatives like Samagra Shiksha to improve learning outcomes.
  • Expand healthcare access through Ayushman Bharat, with a focus on rural areas.
• Promoting Gender Equity in Employment:
  • Ensure equal access to credit and entrepreneurship support for women (e.g., Mudra Yojana).
  • Increase female workforce participation by ensuring workplace safety, maternity benefits, and flexible working conditions.

Conclusion

Achieving inclusive growth is essential for sustainable development, aligning with SDGs 1 (No Poverty), 5 (Gender Equality), 8 (Decent Work & Economic Growth), and 10 (Reduced Inequalities). Targeted policy interventions in employment, social security, financial inclusion, and infrastructure can bridge the existing development gaps.