#45: GS3 | Inclusive Growth & Issues arising out of it
Free Notes for GS3 topic
This blog post is a guest contribution by my brother @Conquerias24 who’s a Post Graduate in Economics from Madras School of Economics.
What is Inclusive Growth?
As per UNDP, inclusive growth is “the process and the outcome where all groups of people have participated in the organization of growth and have benefited equitably from it”.
Economic Growth + Equitable Distribution = Inclusive Growth
Salient Features of Inclusive Growth
- Economic growth
- Poverty alleviation
- Equality of opportunities; participation of all
- Reduction in income and wealth inequality
- Address barriers faced by the excluded and marginalized
- Non-discriminatory and should be favorable for the excluded
- Access to basic infra: housing, sanitation, clean drinking water etc.
- Access to basic services like education and health
Elements of Inclusive Growth
Inclusive Growth has 5 major elements that you shall prepare (as given in the flowchart below)
Skill Development
Need to harness demographic by better
- education
- skills
- health
Need of skill development in India
- Lack of highly trained workforce
- To create improved human capital
- Demand-supply divide b/w industry and academia => unemployment
- Better skill -> Participation of poor in economic growth -> Poverty eradication
Government Schemes
- SANKALP Program: District level upskilling ecosystem
- Rozgar Mela: To offer employment opportunities
- PM Kaushal Kendra: Model Training Centers in districts
- PM Kaushal Vikas Yojana (2015): Short term training & skilling via ITIs
- STRIVE Project: Improve performance of ITI (Industrial Training Institutes)
- Udaan Initiative: Address the needs of the educated unemployed in J&K
- Capacity Building Scheme: Skill Development Training for unemployed youths of NER
Other Initiatives
- Mandatory CSR Expenditure in Upskilling
- Skill Impact Bond by NSDC (with other global foundations)
- TEJAS Initiative for Skilling: Skilling, certification and overseas employment of Indians in UAE
Financial Inclusion
Definition
Delivering banking services at affordable cost to disadvantaged masses and low-income groups
Need of Financial Inclusion in India
- Banking access to rural Indians
- Formal credit access for rural demands
- Push for digital economy & reduce cash economy
- Reduced leakages & corruption in service delivery (via DBT)
- Incentivize savings which leads to surplus formal capital and thus, greater investment rates
Government Efforts
- Atal Pension Yojana
- PM Mudra Yojana
- PM Jeevan Jyoti Bima Yojana
- PM Suraksha Bima Yojana
- JAM Trinity: Jan dhan (PMJDY), Aadhar and Mobile -> better service delivery
- Digital Push: UPI, Aadhar-enabled Payment System (AePS), USSD-based mobile banking service etc.
RBI/NABARD efforts
- Kisan Credit Cards
- Increased ATMs
- SHGs linked with Banks
- Project Financial Literacy
- New bank branches in rural areas
- Evolved banking models etc.
Challenges in Financial Inclusion
- Digital Divide
- Poor credit penetration
- Informal/cash dominated economy
- Non-universal access to bank account
- Gender gap in credit and digital access
Technological Advancement
Some use cases:
Agriculture
- Lower production cost
- Enhanced soil conservation
- Enhanced productivity & production
- Improved efficiency & competitiveness of agri-value chain
- Price rationalization for farmers: (eg: e-NAM)
- Govt efforts (DBT, AGMARKNET, AgriStack, Village Resources Centre, Digital Agri Mission etc.)
Manufacturing
- Attracts FDI
- Reduced production cost
- Raise quality of output
- Enhanced international competitiveness of the product
- Handle management issues like accounts, procurement etc.
Education
- AI/ML and innovative tech
- New types of adaptive and peer learning
Governance
- Reduced delays
- Lower corruption
- Efficient public service delivery
- Addresses trust deficit between citizens and public institutions
- eg: E-leg, e-court, e-district, MyGov, MCA21, DigiLocker etc.
Empowerment of the vulnerable
To achieve
- Social Justice (Constitutional Mandate)
- Rural development for economic and social prosperity
- A welfare state
- A modern India w/o discrimination
Vulnerable Section Schemes
Women
- Beti Bachao Beti Padhao
- Women Helplines
- Mahila Shakti Kendras
- One Stop Centre Scheme (to help women in distress)
SC/ST/OBCs
- MGNREGA
- Tribal Sub-Plan
- Eklavya and Kasturba schools
- Swaranjayanti Gram Swarojzar Yojana
- Entrepreneurship Development Programmes
Children
- Poshan Abhiyan
- Mission Vatsalya
- Integrated Child Development Scheme
Economic Growth
Rapid growth of economy for
- Reduced unemployment
- Poverty Alleviation
- Increased per-capita incomes
- Higher tax collection for govt
- Capital formation and higher investments -> better infra
- Attracting FDI (tech transfer + better production quality)
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