Is Inclusive Growth Measureable?
New Delhi, June 05, 2013
"The government has come out with twenty-five monitoring
indicators to chart the country's inclusive growth over
a period of time", said Montek Ahluwalia, Deputy
Chairman of the Planning Commission of India, while
delivering the CUTS 30th Anniversary Lecture at New
Delhi yesterday. "The same will soon be available on the
Planning Commission of India's website for public
access", he added.
The theme of the lecture was "Inclusive Growth: What
does it Mean". Also speaking on the occasion were Mr. Kirit Parikh, Executive Director of Integrated Research
for Action and Development who chaired the session, Mr.
TCA Srinivasa Raghavan, Editorial Advisor to CEO,
Kasturi & Sons and Mr. Surjit Bhalla, Managing Director,
Oxus Research and Investment.
As a precursor to the discussion, Parikh introduced
Inclusive Growth as an open matrix including development
of both poor as well as rich, without neglecting either.
Speaking on the occasion, Ahluwalia acknowledged that
Inclusive Growth is a multi-dimensional concept and
giving it a single definition would not be easy. He also
stated that the concept of Inclusive Growth has now
evolved into the concept of Inclusive and Sustainable
Growth, but we first need to grapple with growth per se,
without ignoring the sustainability dimension.
Nehru, the original growthwallah
Ahluwalia said that the government while looking at the
concept of growth has never focused on strengthening the
nation but on raising the nation to an acceptable level
of living. Calling Pandit Jawahar Lal Nehru, India's
first Prime Minister, the original growthwallah of the
country, he reiterated and agreed with his words that to
bring the nation to an acceptable level of living, the
national income needs to be increased. These words are
from Nehru's drafting in 1938 when he chaired the Indian
National Congress's committee on the economy.
Answering the question on, "Does growth reduce poverty", Ahluwalia responded that in early days, the focus of
growth used to be only poverty reduction, however, it
was gradually realised that to bring in growth more than
eradication of poverty is needed. The cake has to be
expanded to generate resources for poverty reduction.
Growth does not only mean making poor people less poor
but its prime focus should be social mobility, i.e.
giving people a chance to trade their positions in
society.
Inclusive growth on the other hand also faces the
challenges on reducing the gap between various classes
in the country such as the rural-urban divide, among
various Indian states, inequalities across various
socio-economic groups based on caste, gender,
marginalised groups like religious/regional minorities,
handicapped etc.
Ahluwalia strongly felt that the focus of growth must
not be only on reducing poverty but it should also be a
job creating growth benefitting both lower as well as
middle class. He acknowledged that growth is affected
not only by government's policies but also by global
economy, cronyism, among other factors. Keeping in mind
the weak global economy in future, India will need to
strengthen its own backyard, he added.
India can do seven pc growth in the next two years
He stated that India is capable of a growth performance
above 7 percent over the next two years if corrective
and timely measures are taken.
As per Ahluwalia, to achieve the level of growth China
has achieved India will need to improve infrastructure,
improve management of land and urbanisation so that new
management may be set up and finally introduce
flexibility of labour laws. Acknowledging that for a
decent inclusive growth, less restrictive labour laws
will be required, however, consensus will first be
required from labour in this respect.
TCA Srinivasa Raghavan, agreeing with Ahluwalia's view
that glass is certainly not full but is filling,
asserted that the problem is not with the Indian labour
laws but with the manner in which management manages the
trade unions, and how the labour courts perform. He said
that the major way to bring about inclusive growth will
be by achieving non-convexity.
Surjit Bhalla defined Inclusive Growth to mean equality
of opportunity. He acknowledged India as a unique
multi-dimensional country and mentioned that the country
has numerous success stories in terms of social
mobility, child mortality, sex ratio, etc. and there is
a need to advertise and market the story of India's
growth properly and he is hopeful about change.
Lively Q&A session
There was a lively Q&A session, when numerous micro and
macro issues were raised by the over 100 participants in
the hall. For instance, a question was raised on the
role of private sector, and Ahluwalia responded that
healthy competition can lead to better corporate
governance. On sticky industrial relations, he said that
consensus building is going on, and in a democracy like
India, it is not easy. He asserted that
non-discriminatory participation of every citizen is
required.
Questions were also raised on industrial relations,
security and other issues.
Pradeep Mehta of CUTS referring to his long association
with Ahluwalia and said that according to CUTS studies,
flanking policies such as education, health, social
infrastructure need to be effectively in place for
reaping the benefits of growth, otherwise it can lead to
asymmetries.
Marking an end to the session, Kirit Parikh in his
summarization said that the multi-dimensional concept of
Inclusive Growth should translate to mean every child
having an expectation of a basic minimum income.
While proposing the vote of thanks, Bipul Chatterjee,
said that while it is easy to measure absolute growth,
mechanics of measuring inclusive growth need to be
developed. Ends.