Unit 8 - Inclusive Growth And Issues Arising From It PDF

UNIT 8 INCLUSIVE GROWTH AND ISSUES ARISING FROM IT 8.1 What is Inclusive Growth?  Inclusive growth means economic growth that creates employment opportunities and helps in reducing poverty.  It means having access to essential services in health and education by the po...

UNIT 8 INCLUSIVE GROWTH AND ISSUES ARISING FROM IT 8.1 What is Inclusive Growth?  Inclusive growth means economic growth that creates employment opportunities and helps in reducing poverty.  It means having access to essential services in health and education by the poor. It includes providing equality of opportunity, empowering people through education and skill development.  World Bank  Inclusive growth refers to the pace and pattern of growth, which are interconnected and must address jointly.  OECD  As per OECD (Organisation for Economic Co-operation and Development), inclusive growth is economic growth that is distributed fairly across society and creates opportunities for all. 8.2 Features of Inclusive Growth:  Considered as the limitations of the excluded and marginalised  Participation of all segments of society  Non – Discriminatory in Nature  Has greater poverty – reduction potential  Ensures that individuals have access to fundamental facilities and services, such as basic health and education.  This access should cover both number and quality of these fundamental services.  Include poor people, lagging socioeconomic groups, and trailing areas as participants in this growth. 8.3 Need for Inclusive growth:  Economic prosperity  Rapid and sustainable poverty reduction necessitates inclusive growth that allows individuals to both contribute to and benefit from economic prosperity.  Industrial Growth  Addressing slow industrial growth is crucial.  Infrastructural Issues  Inadequate infrastructure hinders economic progress and risks a middle income trap.  Regional Balance  Equitable growth across all states and regions is essential. o The estimated per capita income across Sikkim was the highest among Indian states at around 519 thousand Indian rupees in the financial year 2023. Meanwhile, it was the lowest in the northern state of Bihar at over 54 thousand rupees  Agricultural Backwardness  Despite employing over 50% of the workforce, agriculture’s GDP contribution is low.  Poor Nutrition levels  Addressing chronic under nutrition is crucial, as reflected by India’s low global hunger index ranking. o The 2023 Global Hunger Index gives India a rank of 111 out of 125 countries shows grim situation and the country is battling widesapread hunger.  Health and Education  It entails the underprivileged having access to basic health and education services. It entails ensuring equitable opportunity and empowering individuals via education and skill development. o In keeping with this objective, Central and State Governments' budgeted expenditure on health sector reached 2.1 percent of GDP in 2021-22, against 1.3 percent in 2019- 20. 8.4 Elements of Inclusive growth:  Skill Development  Harnessing the demographic dividend will depend upon the employability of the working age population, their health, education, vocational training and skills. Skill development plays a key role here. o UNICEF 2019 reports stats that at least 47% of Indian youth are not on track to have the education and skills necessary for employment in 2030.  Financial Inclusion  Financial Inclusion is the process of ensuring access to financial services to vulnerable groups at affordable costs.  Technological Advancements  The world is moving towards an era of Industrial Revolution 4.0. These technological advancements have capabilities to both decrease or increase the inequality depending on the way these are being used. Several initiatives have been taken by the government, Ex: Digital India Mission, so that a digitally literate population can leverage technology for endless possibilities.  Economic Growth  India is among the fastest-growing major economies in the world. However, currently Indian economy is facing slowdown due to both cyclic and structural challenges. However, the target of becoming a $ 5 trillion economy by 2024-25 can allow India to reduce inequality, increase social expenditure and provide employment to all.  Social Development  It means the empowerment of all marginalised sections of the population like SC/ST/OBC/Minorities, women and transgenders. Empowerment can be done by improving institutions of the social structure i.e. hospitals especially primary care in the rural areas, schools, universities, etc. Investment in social structures will not only boost growth (by fiscal stimulus) but will also create a healthy and capable generation to handle future work.  Energy Security  Uninterrupted, affordable energy is essential for sustained economic growth.  Access to justice for all  Providing affordable access to formal and informal justice systems is crucial for addressing grievances. 8.5 Inclusive Growth – Constitutional Mandate:  Article 38(1)  The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.  Article 38(2)  The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.  Article 39  The State shall, in particular, direct its policy towards securing o (a) that the citizens, men and women equally, have the right to an adequate means of livelihood; o (b) that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good; o (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;  o (d) that there is equal pay for equal work for both men and women;  Article 39(A)  The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities  Article 41  The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.  Article 42  The State shall make provision for securing just and humane conditions of work and for maternity relief.  Article 46  The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.  Article 47  The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.  Article 48(A)  The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country. 8.6 Dimensions of Inclusive Growth: Equality:  Equality of opportunity in terms of access to markets, resources, and a fair regulatory environment  To realize the IG in its ultimate form, equality is the most fundamental criteria.  Different types of inequality exists in India ranging from Socio – Economic Inequalities, the Rural – Urban Split, Digital Divide, etc.  IG and equality are mutually reinforcing. Without equality, IG can’t be achieved and lack of IG may lead to in-equality in real or perceived forms  In contemporary economic environment, gender equality has become a basic element of IG.  An OECD report has identified that inequality in India has been continuously rising which has posed policy challenges in promotion of inclusiveness. Good Governance:  Governance means the regulatory or the monitoring process which facilitates the delivery of the government services.  Good governance results in effectiveness and efficiency, it upholds justice in the rule of law, and accountability and it encourages popular participation, consensus, and equality  Good governance is an integrated effort of state, civil society and citizens  Good governance is the core of essential public services  Good governance provides a common platform for all actors and adapts to sustain the socio- economic transformation which is a pre-requisite of IG.  Private governance highlights the role of private sector in meeting the demand of capital, resource and skills required for IG. Decentralization:  Empowering local self-governing institutions is one of the delivery mechanisms of the IG  73rd and 74th amendments of the constitutions are innovation in the field of Indian Polity  The eleventh plan has devised a Devolution Index to be called PRI-Empowerment Index to empower the PRIs   Therefore, govt. has to devolve, delegate and decentralize the administration.  Decentralization is a bottom-up approach  The following are the deficiencies in decentralization that limit the IG potential: o Lack of finance, proper institutions and delegation of roles and responsibilities. o Divergence in central and state approaches in programs and welfare schemes. o Incoherence in organization at national and state level. o Poor accountability, transparency and monitoring mechanism. Accountability and Transparency:  Accountability is answerability towards performance of service delivery  Accountability is specified both in vertically and horizontally. o The former refers to the departmental hierarchy in a govt. institutions and the latter refers to the autonomous agencies for check and balances on govt. activities e.g. CAG, PMO etc.  Transparency is necessary for efficient delivery of essential public services; it acts as an enabler for citizens in accessing information on demand which helps them in reinstating their claims on government endowments and entitlements meant for them  Citizen Charter, Right To Information, Central Vigilance Commission are revolutionary efforts in achieving accountability and transparency. Sustainability  Sustainability and IG can’t be achieved in isolation and they supplement each other.  Sustainability is required at the following levels when charting out the policy framework for IG: o Financial Sustainability: The IG programs and projects of the govt. should be financially viable. It may be noticed that excess of subsidy and lack of outcome orientation is causing a problem of increasing fiscal deficit. o Social Sustainability: Social sustainability means the need to maintain and sustain specific structure and culture. This type of problem is typically prevalent in tribal areas where the development programs for economic growth come in conflict with the cultural sentiments of the tribal population. o Environment Sustainability: In long-term, the environment standards must not be jeopardized while in pursuit of IG. By excess use of fertilize, it has led to unique problem of depletion of soil productivity and technology fatigue. 8.7 Sustainable Development Growth & Inclusive Growth:  For peace and prosperity for people and planet, both now and in future, is provided by the 2030 Agenda for Sustainable Development which was accepted by all United Nations Member States in 2015.  The 17 SDGs, which are urgent call to action for all nations – developed and developing – in global partnership, are at centre of it.  SDG 8  Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. 8.8 Factors Affecting Inclusive Growth: Inequity:  There are fundamental inequalities in society that cannot be explained by individual differences.  Socioeconomic and political structures play a role in sustaining these inequities, hindering development.  Inclusive development aims to address these inequities and promote fairness.  Growing inequity in the context of rapid globalization poses new challenges to inclusive development.  Groups historically excluded and underserved, including minorities, women, people with disabilities, and the economically disadvantaged, need to be included for sustainable development with equity. Social Exclusion:  Social inclusion/exclusion is complex and tied to the social and relational context of individuals.  Social structures promote inequality and exclude certain individuals from participating in social life.  Marginalization and exclusion exist even in economically developed countries, affecting opportunities for certain groups. Poverty:  Exclusion impacts the poor the most, and the more profound the exclusion, the more devastating the impacts.  Poverty is not just about income; it encompasses multiple dimensions of deprivation.  The poor have limited participation in decision-making and struggle to claim a share of development.  Inclusion enables the poor to enhance their capabilities, become more productive, and increase their income. Disparity:  Disparities in the region, gender, caste, and class are widespread and influenced by natural, socio-cultural, and policy factors.  Natural factors such as geography, climate, and resources affect economic development potential.  Socio-cultural factors, like values and traditions, can either encourage or discourage social and economic mobility.  Policy decisions by governments can also contribute to disparities, favoring certain groups or regions.  Inclusive development aims to address these disparities and promote equity. Displacement:  Forced displacements, with their socio-economic and cultural effects, hinder development.  Displacement leads to significant losses, suffering, and resistance movements. 8.9 Different strategies used for Implementation of Inclusive Growth: Resource Allocation:  Without proper resource utilization, the issues of poverty, equity and development can not be addressed.  Equitable sharing of the resources is one of the most important means to implement the inclusive growth based policy framework.  The allocation of resources should be made in a way to benefit the general mass in short and long term  Public distribution system (PDS) is a classic example of reinforcing IG through proper resource allocation, though it needs to be re-structured. Employment Generation:  Employment is the most vital of all strategies of inclusive growth.  India is witnessing a demographic transition and advantage of demographic dividend  Unemployment growth in recent years has been accompanied by growth in casualization and informalization.  A transition of increasing employment from unorganized to organized sector is an indication of socio-economic development.  Indian economy is marked by the disguised employment as a large chunk of the man force is employed in agriculture sector where the very low marginal productivity  For a sustaining inclusive growth, government is required to develop policy framework for employment generation as a top priority. MNREGS is a successful attempt in this regard.  Poverty alleviation schemes through resource distribution may be remedy for short term but in long term employment generation is the only way out. This is because resource distribution through subsidization enlarges fiscal deficit and burden on exchequer while employment is productive in its tendency. Skill Building and Capacity Development:  Skill deficit is a major impediment in IG. Government has created a framework for entrepreneurship.  Employment generation may not fulfill the rising employment demand due to large share of the population lying in the informal sector.  Skill and capacity development are therefore cornerstone  Key agencies involved are National Skill Development Council, National Council of Vocational Training and Directorate General of Employment and Training, other govt. and non- govt. agencies, business chambers etc  The govt. has also launched a skill development initiative scheme – Pradhan Mantri Kaushal Vikas Yojana (PMKVY) Agriculture:  Agriculture is the central pillar of inclusive growth.  It provides employment to unskilled workforce and sustenance to the population.  Although average annual growth rate of agriculture has increased from 11th FYP, but at the same time rural distress, farmers’ suicides and debt have also increased  Inflation, vulnerability to world commodity prices, regional disparities have been newly emerging challenges  Five factors which the govt. needs to work out and that may unblock the agriculture growth potential are: public investment, private investment, technology, diversification and fertilizer   Agriculture growth rate above 4% and investment in agriculture must be around 15%-20% of the GDP  Environment friendly practices can provide the sustainability. 8.10 Inclusive Growth & 12th FYP:  The Government of India's 12th Five-Year Plan (2012–17) was the country's last Five-Year Plan.  The Government of India's Twelfth Five-Year Plan was set to reach a growth rate of 9%, but the National Development Council (NDC) accepted an 8% growth rate for the Twelfth Plan on December 27, 2012.  During the 12th Five-Year Plan, the government aims to reduce poverty by 10%.  The plan intends to improve the nation's infrastructure projects while preventing bottlenecks of any kind.  The paper provided by the planning commission aims to attract private investments of up to $1 trillion in infrastructure growth in the 12th five-year plan, as well as a reduction in the government's subsidy burden to 1.5 percent of GDP from 2%. (gross domestic product). Objectives: Economic growth:  The real GDP is growing at an annual rate of 8%.  Agriculture is growing at a rate of 4%.  Manufacturing is growing at a 10% rate.  Every state must achieve a faster rate of growth than that of the 11th plan. Poverty and Employment:  The poverty rate will be lowered by 10% compared to the end of the 11th plan.  In the non-farm sector, there are 5 million new job openings and skill certifications Education:  The average number of years spent in school will rise to seven.  In higher education, there are 20 lakh seats available for each age group.  End the gender and social disparities in school enrollment. Health:  Increase the Child Sex Ratio to 950 by lowering the IMR to 25 and the MMR to 1.  Total Fertility Rate (TFR) should be reduced to 2.1.  Reduce child malnutrition in the 0-3 age range to half of the NFHS-3 level. Infrastructure:  Infrastructure investment accounts for 9% of GDP (gross irrigated area). 103 million hectares of land (from 90 million hectare)  All communities will have electricity, and AT&C losses will be reduced by 20%.  All-Weather Roads Connect Villages  National and state highways must have a minimum of two lanes.  Dedicated Freight Corridors on both the east and west coasts.  Teledensity in rural areas has reached 70%.  50 percent of the rural population will have access to 40 litres of drinking water per day, and 50 percent of all Gram Panchayats will have Nirmal Gram status. Environment and Sustainability:  Every year, increase green cover by 1 million hectares.  Over a five-year period, 30,000 MW of renewable energy will be generated.  By 2020, the GDP emission intensity will be decreased to 20-25 percent of 2005 levels. Service Delivery:  90 percent of Indian households have access to banking services.  Subsidies and welfare payments will be made through the Aadhar-based Direct Cash Transfer Scheme. Conclusion: The Twelfth Five Year Plan (2012-17) aims for an annual growth rate of 8%. When compared to the initial approach paper, this is the amended rate. The Twelfth Plan's slogan is 'Faster, Sustainable, and More Inclusive Growth.' The Government of India's Twelfth Five-Year Plan was supposed to achieve a growth rate of 9%, however, on December 27, 2012, the National Development Council (NDC) agreed to an 8% growth rate for the Twelfth Plan. 8.11 India @ 75 by NITI Aayog & Inclusive Growth:  New India  NITI Aayog’s strategy for New India @ 75 is an effort to integrate innovation, technology, enterprise and effective management at the center of policy formulation and execution.  Policy Course  It will promote debate and solicit comments for further adjusting our policy.  Jan Andolan  Without the involvement of general people, economic transformations, in our opinion, cannot occur. The Jan Andolan record must be adopted. The Inclusive Growth Goals of New India @ 75 Vision are as follows:  A quick, clean, consistent, structured growth that is inclusive, reaching 9 – 10% by 2022 – 2023.  By 2022 – 2023, use technology to promote inclusive, sustainable and participatory development.  Ensuring that urban poor and slum inhabitants especially new migrants, can access city services, via inclusive development.  To increase accessibility to higher education for the most vulnerable communities.  To provide close – to – the – public high – quality ambulatory services for a comprehensive package of diagnostic, curative, rehabilitative and palliative care.  To develop a broad – based policy framework with citizens at its core. 8.12 Policy Interventions to achieve Inclusive Growth: Rural Economy based growth:  Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)  Mission Antyodaya  The National Rurban Mission  Pradhan Mantri Awas Yojana – Gramin  Pradhan Mantri Adarsh Gram Yojana (PMAGY)  Pradhan Mantri Gram Sadak Yojana (PMGSY) Sustainable and Inclusive Agricultural Growth:  PM Kisan Sampada Yojana   PM Fasal Bima Yojana  Pradhan Mantri Krishi Sinchayee Yojana  National Agriculture Market  National Livestock Mission (NLM) Holistic approach to combat poverty in India:  Integrated Rural Development Programme (IRDP)  Jawahar Rojgar Yojana  Food for Work Programme  Annapurna scheme  National Rural Livelihood Mission  National Urban Livelihood Mission Social Sector Development:  Pradhan Mantri Jan Dhan Yojana  Pradhan Mantri Mudra Yojana (PMMY)  Ayushman Bharat Scheme  Mission Indradhanush  Midday Meal Scheme Role of Public and Private Partnership in this Regard:  The Swachhta Udyami Yojana  Redevelopment of Railway Stations through Public – Private Partnership  Setting up integrated schools for sports and academics at sports authority of India  Enhancement in Viability gap funding for social sector  Structuring of Bharatnet on PPP Mode Balanced Regional Growth:  Pradhan Mantri Khanij Kshetra Kalyan Yojana  One District One Product Scheme  The Backward Region Grant Fund (BRGF)  North East Industrial and Investment Promotion Policy 8.12 India’s Regional Income disparities: The income disparities among India's states over the past three decades have increased significantly. Uneven resource distribution and resource curse  Regions with abundant natural resources may experience faster economic growth compared to resource-poor regions. Ex: Gujrat’s rich natural resources, including a strategic coastline and mineral reserves.  High per capita income (PCI in 2022-23:250100 Rupees) and rapid economic development. In contrast, Bihar’s resource limitations, marked by water and soil issues-lower per capita income (PCI in 2022-23:49470 Rupees) and greater poverty rates. Uneven Industrialization and Infrastructure development (Higher levels of primacy):  Investments in industrialization and infrastructure development tend to be concentrated in certain areas, leading to disparities in economic activity and job opportunities.  This regional bias is partly result of colonial legacy which resulted in development of few primate cities like Delhi, Kolkata at cost of others Physiographic variations:  Differences in terrain, climate, and geographical features, have contributed to significant regional disparities in economic development. Ex: The Himalayan region-rugged terrain, less suitable for agriculture and industrial development.  While the Indo-Gangetic Plains, known for fertile alluvial soil and flat landscapes, more conducive to farming, higher agricultural productivity and greater population density. Shape of the country:  India’s prorupted shape, characterized by the presence of a narrow corridor of land connecting the main territory to the northeastern states, has contributed to regional disparities due to Connectivity Challenges, Isolation, Limited Trade Opportunities etc. Political heterogeneity of the country:  Political heterogeneity in large countries can result in variations in policy decisions and resource allocation, leading to regional disparities based on differing political ideologies, priorities, and interests.  Ex: Kerala’s left-wing policies have prioritized social welfare, leading to high literacy and strong healthcare; Gujarat’s right-wing focus on industrial growth has attracted investment, driving economic development. 8.13 Reasons behind regional disparities in India:  Low rate of economic growth  India’s economic growth hasn’t matched its rapid population growth. This has led to a lack of equal job opportunities in all parts of the country, especially in areas that are still developing.  Socio-economic and political organisation of states  The states haven’t made significant changes or reforms, like land reforms. There’s still a feudal mindset, and laws about land limits and redistribution weren’t applied properly. Even the land set aside for redistribution wasn’t distributed effectively. Political activities in underdeveloped areas mostly focused on gaining votes and involved corruption.  Lower level of infrastructural facilities in backward states  The level of infrastructural development, such as- power distribution, irrigation facilities, roads, modern markets for agricultural produce has been at back stage. All these are state list subjects.  Low level of social expenditure by states on education, health and sanitation  These subjects are core for human resource development. The states which have invested heavily on these subjects, fall under the developed and advanced states, Ex: Tamil Nadu, where health care services in Primary health centre is bench mark for other states.  Political and administration failure  This leads to tension and creates movements for new states within larger regions. Failures in addressing these issues resulted in the creation of states like Jharkhand, Chattisgarh, Uttrakhand, and Telangana. Many other regions like Vidarbha, Saurashtra, Darjeeling, Bodoland, etc., are also demanding separate states. These failures make private investors lose confidence and don’t attract investment to these states. 8.14 Environment vs Development Debate:  Industrialisation and Urbanisation are considered sine qua non for economic development and egalitarian growth. At the same time, they also led to Pollution, Deforestation and Habitat Destruction, Climate Change, Species Extinction, Health hazards, Disruption of Traditional Livelihood, Dead Zones in Oceans, Chronic Water Scarcity. Developmental factors affecting Environmental Sustainability:  Lack of Environmental Compliance  Neglect of environmental principles is a key reason why natural hazards end up causing a significant number of avoidable casualties. o Any exercise to scientifically ascertain the risk from natural hazards to a region are barely implemented in the right spirit. o Unregulated quarrying and the unscientific cutting of slopes into hills aggravates the risk of soil erosion and subsequently increases the risk of landslides.  Ill-effects of Subsidies  In pursuit of providing welfare to vulnerable sections of society, the government has provided a bulk of subsidies. o However, subsidised nature of services like energy and electricity leads to their overuse and undermines environmental sustainability. o Further, subsidies also undermine the revenue base and limit the government’s capacity to invest in new, cleaner technologies.  No Cost to Environmental Resources  Access to natural resources is entirely open and no individual user bears the full cost of environmental degradation and resources are consequently overused.  Complexity of Population Dynamics  Increasing population tends to exacerbate the linkages between underdevelopment and environmental degradation. o Further, poverty generates significant incentives to raise large families and stimulate migrations, which makes urban areas environmentally unsustainable. o Both outcomes increase pressure on resources and consequently worsen environmental quality, diminish productivity and reinforce poverty. Way Forward:  Feminization of Development  Wide range of investments like expanding educational opportunities for women and, improving water supply and sanitation services, may lead to the highest returns for development and the environment. o It will also increase synergies between poverty alleviation and environmental protection.  Prudent Economic Policies  Economic policies such as rationalization of price subsidies, the clarification of property rights, facilitation of technology transfer may help in achieving environmental sustainability. o Rationalising subsidies will save money, improves efficiency and can significantly lower pollution. o Also, open access to environmental resources needs to be replaced with some ordered system of use or ownership rights. Community ownership of resources can result in sound environmental stewardship, particularly where it is based on customary social practices.  Incorporating Indigenous Knowledge  Regions and countries can benefit from the knowledge of indigenous people and their understanding of large ecosystems. o Thus, Governance, including customary institutions and management systems should involve indigenous peoples and local communities to safeguard nature and understand climate change.  Conserving Biodiversity  The linkage of biodiversity and environmental sustainability highlights the critical need to integrate biodiversity considerations in global decision-making. 8.15 Measuring Inclusive Growth: Inclusive Development Indie (IDI):  In the Inclusive Development Index (IDI) compiled by the World Economic Forum (WEF), India ranked 62nd out of 74 emerging countries and was among the least inclusive countries in Group of 20 (G-20) countries.  The IDI is based on the idea that most people base their country’s growth not on GDP but by their own standard of living.  It gives a measure of inequality based on three parameters: : o Growth and development o Inclusion o Inter-generational equity and sustainability.  India also did not make it to the top 10 most inclusive emerging and developing economies, where its neighbours Nepal, China and Sri Lanka made a mark.  India performed its best in terms of “intergenerational equity and sustainability”, ranking 44th, for which credit can be attributed to its demographic dividend. Social Progress Index:  It is an aggregate index of social and environmental indicators which includes the following: o Basic human need o Foundation of well being o Opportunity Benefits:  SPI measures the outcomes of the government measures rather than money spent. It also takes account of efficiency by which money spent by the government has been used.  It is more comprehensive. Global Slavery Index:  It is released by the Walk Free Foundation of Australia.  Modern Slavery means a situation where one person has taken away another person's freedom, to control their body so that they can be exploited.  Factors responsible for modern slavery: o Absence of rights o Lack of physical safety o Access to necessities such as health care, education, food, etc o Pattern of migration  Government actions to reduce modern slavery: o India has worked in the right direction by criminalizing trafficking, slavery, forced labor, child prostitution, and child marriage. 8.16 Benefits of Inclusive Growth: Social:  Lower incidence of poverty  Concept of IG take all stakeholders simultaneously which will reduce the incidence of poverty.  Broad-based and significant improvement in health outcomes  IG means enhancing capabilities of all, will also improve the health outcomes.  Universal access for children to school  Will not only lower illiteracy but also improve   Increased access to higher education  Improved standards of education, including skill development.  Improvement in provision of basic amenities  Like water, electricity, roads, sanitation and housing.  Reduction in disparity  Due to IG there will be reduction in disparity among various ethnic and tribal groups. Economic:  Better opportunities  For both wage employment and livelihood.  More balanced growth  A decisive reduction in poverty and an expansion in economic opportunities for all sections of the population will enhance balanced growth.  Gender equality and economic growth  Gender equality will promote economic growth, with positive impacts on macro-level growth, human capital and labour agricultural productivity.  Initiate virtuous cycle  Inclusive growth and financial inclusion leads to the culture of saving, which initiates a virtuous cycle of economic development.  Increase labour force participation  With empowerment of females there will be increase in labour force participation.  Demand-Supply match  There will be better match in skill demand and match, as due to IG there will be greater skill development.  Demographic boon  With better demographic, India can become the largest contributor in global supply chain. Political:  Decrease in violence  With empowerment of vulnerable section there will be less incidence of violence.  Freedom and dignity  IG provide freedom and dignity, without social or political obstacles  Right to equality  IG provides equality in opportunities which is the enshrined goal of our constitution.  Good governance  Taking all together will make governance efforts more precise and streamlined which make development of all. 8.17 Challenges in achieving Inclusive Growth:  Widespread Poverty  As many as 415 million people in India were lifted out of poverty from 2005-06 to 2019-21, according to the latest update of its global Multidimensional Poverty Index.  Agricultural backwardness  Steeper decline in per capita land availability, shrinking of farm size, low labour productivity in agriculture, decline in Yield growth due to land and water problems, vulnerability to world commodity prices, formers suicides, etc.  Massive unemployment  The quality and quantity of employment in India dependence on agriculture. The quality of employment is a problem as more than 80% of people work in the informal sector without any social security.  Lack of identification of target beneficiaries  In order to allow economic development process to reach all sections of society especially the downtrodden, there is a need to identify the beneficiaries in a proper way. Without proper identification, the process of development will lack in efficiency.  Societal opposition  Whenever the government tries to bring in backward communities into the forefront, there will be certain opposition from established groups. Lack of support from society will result in the process of inclusive growth being hampered. 8.18 Way Forward:  India can take cue from some internationally best inclusive programmes o Brazil  ‘Bolsa Familia’: provides financial aid to poor Brazilian families; if they have children, families must ensure that the children attend school and are vaccinated. o Mexico  Oportunidades’: Is a government social assistance in which cash payments are made from the government directly to families to decrease overhead and corruption. o Sri Lanka  ‘Samruddhi Kosh’ o China  ‘Harmonious Develop o United Kingdom  Organizations adopting living wages report higher employee satisfaction, lower turnover and increased productivity.  Relevant skilling  With the onset of the IT revolution it has become obligatory to acquire even higher levels of skills. Hence it is a matter of urgency to provide adequate facilities for relevant skills to the disadvantaged.  Improve government education  There is a need to improve the functioning of government schools without losing more time. There is also a need to expand and modernise teacher-training facilities.  Labour intensive development  It is also important that growth in developing economies continues to remain more labour- intensive and broad-based, as a generation of production employment opportunities on a large scale is perhaps the best way.  Agricultural development  research needs to be greatly strengthened both in terms of the resources devoted and also by implementing institutional reform along the lines recommended by the Mashelkar Committee and the Swaminathan Committee.  Taxation  More progressive tax system in India would help raise capital for expenditure on infrastructure, healthcare, basic services and education.  Decentralization  Gram Sabha should be empowered and made effective especially in tribal areas and as per FRA their consent should be made mandatory of mining lease. 8.19 Conclusion:  Inclusive growth is of vital importance to fight inequality in all aspects and promote holistic development of individuals in the country. Inclusive growth is necessary for the sustainable and holistic development of all sections of the society. For economic, social and political empowerment of its citizens, the core components of the Inclusive growth must be tackled.  India's aim to replace the minimum wage with a living wage by 2025 represents a significant step towards improving the lives of Indian workers. The government's commitment to developing a well-defined and operational system, with technical assistance from the ILO, is crucial for the successful implementation of this policy. Balancing affordability for businesses with ensuring worker well-being will be key to achieving this goal.