Strategies For Inclusive Growth
Strategies for Inclusive Growth
by
Anshum Saxena
ansaxena@crisil.com
05-10-07
Executive Summary
India economy has witnessed tremendous growth in the past 4 or 5 years and is poised to grow at a good rate for the next few decades. The scenario however is in the backdrop of the change in the dynamics and structure of the economy, which is moving from primarily being an agrarian economy with agriculture the major contributor toward the GDP to a service based economy with services today, the major contributor to the GDP and the growth rate of 10% approximately.
Agriculture sector, which is losing its share to services, is a major employer in the country; with more than 60% of the people dependent on it for their livelihood. The sector however has been witnessing low growth of 2% with negative marginal productivity. The above mentioned reasons coupled with some other discussed in the paper bring out a distribution of asset and income in the country. There are stark differences and disparities in the distribution which clearly depicts that the majority of the people are being left out of the growth ride.
The paper presents arguments for the growing disparity in the backdrop of high economic growth and how the policy initiatives of the past led to this scenario of inequality in the growth of the people. Then we discuss an integrated strategy to crack the two major problems
(1) Increasing the growth and productivity of the agriculture sector and the policy initiatives to empower the people.
(2) Transferring the surplus labor to the higher productive sectors and other policy initiative for inclusive growth.
Upward Growth Path
The Indian economy has been on an upward growth path. In the last fiscal year ended in
March 2007, growth of GDP in real terms was 9.4 per cent. The average growth rate over the...
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