Sambhav-2025

Approach Mention India’s economic growth trajectory since the 1991 reforms, highlighting the gap between growth and inclusivity. Discuss the causes behind the lack of inclusive growth. Propose measures to achieve inclusive growth. Conclude suitably.

Introduction

India has experienced impressive economic growth since the 1991 liberalization, with GDP expanding at an average rate of 6-7% per annum over the past three decades. Despite this, inclusive growth—where economic benefits are equitably distributed among all sections of society—remains a challenge.

Body

Causes Behind the Lack of Inclusive Growth

• Regional Disparities
  • Economic growth is concentrated in metropolitan cities, while Bihar, Jharkhand, and Uttar Pradesh still lag behind in key development indicators.
  • According to NITI Aayog’s Multidimensional Poverty Index (2021), Bihar has the highest poverty rate at 51.91%, while Kerala has the lowest at 0.71%.
• Jobless Growth
  • Growth has been driven by capital-intensive industries like IT and services, leading to low employment generation in the manufacturing sector.
  • As per Periodic Labour Force Survey (PLFS) 2022-23, India’s unemployment rate is 3.2%, but youth unemployment (15-29 years) remains high at 10.3%.
• Informal Sector Dominance
  • Over 85% of India’s workforce is employed in the informal sector, with low wages, no social security, and job insecurity (Economic Survey 2022-23).
• Gender and Social Inequality
  • The Labour Force Participation Rate (LFPR) for women is just 37%, compared to 83% for men (World Bank, 2023).
  • Caste and tribal disparities persist, with Scheduled Castes (SCs) and Scheduled Tribes (STs) having lower access to higher education and jobs.
• Educational and Skill Deficit
  • ASER Report 2023 highlights that only 73% of Class V students can read a Class II-level text, impacting employability.
  • Only 48% of India's workforce is formally skilled, compared to 96% in South Korea (ILO, 2023).
• Agrarian Distress
  • Agriculture contributes only 16% to GDP but employs over 45% of the workforce, leading to disguised unemployment.
  • Average farm income in India is only ₹10,218 per month (NABARD, 2022).
• Infrastructure and Digital Divide
  • Over 30% of rural households still lack access to reliable electricity (CEA, 2023).
  • Internet penetration is only 55% in rural India, limiting access to digital education and financial services (TRAI, 2023).
• Weak Social Security Net
  • Only 20% of the workforce has access to formal social security benefits like pensions and insurance (Economic Survey 2023).

Measures to Achieve Inclusive Growth

• Employment Generation
  • Focus on labour-intensive industries such as textiles, construction, and tourism.
  • Production-Linked Incentive (PLI) schemes can be expanded to MSMEs to create job opportunities.
• Agricultural Reforms
  • Increase MSP coverage and ensure timely procurement.
  • Promote crop diversification and irrigation expansion under PM Krishi Sinchayee Yojana.
• Financial Inclusion
  • Strengthen PM Jan Dhan Yojana, which has already helped in opening 49.78 crore bank accounts (as of 2023).
  • Expand microfinance and digital banking penetration in rural areas.
• Social Sector Investments
  • Increase health spending to at least 3% of GDP (currently ~2% as per Economic Survey 2022-23).
  • Improve public education and invest in vocational training through Skill India Mission.
• Bridging the Infrastructure and Digital Divide
  • BharatNet Project aims to provide high-speed broadband to all villages by 2025.
  • Road and rail connectivity should be improved in aspirational districts under PM Gati Shakti.
• Women and Marginalized Inclusion
  • Maternity leave, workplace safety, and equal pay policies need stricter implementation.
  • Earmark a percentage of government contracts and MSME loans for SCs, STs, and women entrepreneurs.
• Labour Law and Policy Reforms
  • Implement the four new Labour Codes to ensure social security for gig and platform workers.
  • Expand MGNREGA-like schemes for urban workers to reduce unemployment.

Conclusion

While India has made commendable progress in economic growth, inclusive growth remains a work in progress. The government needs to focus on employment-intensive industries, rural development, gender equality, social security, and skill enhancement to bridge the inequality gap. Achieving truly inclusive growth requires a balanced approach, ensuring that economic expansion uplifts all sections of society rather than benefiting a select few.