My take on Inclusive Growth – Part 2 ( ISB Dean Speaker series

 While growth still remains the most important parameter of any poverty reduction attempt, inclusive growth is basically related to redistributive growth.

Inclusive development creates opportunities for all segments of the society in health, education, skill development, jobs, reducing poverty, entrepreneurship etc. on the principle of equality and focuses on outcomes and processes involving people’s participation and benefit-sharing.

While one can’t have Economic Development without economic growth, GDP is not the only indicator of prosperity. A clear example of this statement are countries like China and India who have huge GDPs but lag behind in areas like health, overall wellness and life-expectancy among others.

An inclusive green economy can reduce poverty and inequality

We all aspire to reach better living conditions, yet this will not be possible by following the current growth model. We need a practical, 21^st century development model that connects the dots between the key issues of our time ie. Poverty reduction, job generation , climate change, sustainability etc.

A new pathway called inclusive growth or green economy must be created with five ‘building blocks’ as suggested by the UN.

Block 1 – National economic and social policies tailored to suit all the factors mentioned in my earlier post

Block 2 – Local rights and capabilities ie. The rights one is aiming for, and the capabilities that will be required to access those rights

Block 3 – Inclusive green markets

Block 4 – Harmonising international policies and support

Block 5 – New indices for making progress (wellness index, health parameters etc)

Watch the entire discourse here ^

Each of these blocks have both local and national benefits. A method, integrating environment, social and economic aspects, needs to be adopted in taking decisions concerning development. I believe a “sustainability filter” should be applied when decisions concerning development are taken, to ensure that they are sustainable in the long run.

A sustainability filter must be put on every decision, following which can an SDG (Sustainability Development Goal) actually be followed  Any action or technological decisions which cause maximum impact on environment, social and economic considerations must be rejected.

What is the criteria for these rejections?

The criteria for saying no is simply any action or any technological decision which gives you maximum luxury but with maximum impact (and effect) on the environment, on social and also economic consideration. Only those choices which have minimum impact on these three pillars and the one which has got maximum output in terms of performance has to be taken.

Therefore, we have to bring a method by which environmental, social and economical parts are integrated which is why the filter as such, is important.

India may be one of the fastest growing economies in the world but lags behind its BRICS counterparts on most parameters when it comes to inclusive growth, which is a matter of concern.

Apart from structured reforms like GST, FDI deregulation, bankruptcy laws, inflation targeting, among others, the government has taken up several flagship programmes like Skill India, Startup India, Digital India, Jan Dhan Yojana, Make in India, Housing for all, Power for all etc. after identifying 10 verticals of growth including healthcare, education, agriculture, financial services, manufacturing, retail, power, urbanization, digital connectivity and physical connectivity to ensure inclusive growth for all.

However, the rate at which the benefits of the programme (Skill India) have been reaped by institutions is questionable. The utilization of the Rs 10,000 crore MSME fund has not even been Rs 1000 crore which indicates that the propensity to take risks is poor and still unstable.

In conclusion, I’d say the biggest challenge is to create growth - and to have growth you need to differentiate - and for differentiation you need to innovate - and to innovate you need diversity - and for diversity you need inclusiveness and to manage all of this , you need inclusive leadership.

It is only after the successful incorporation of this cycle can the country say inclusive growth is not a myth, but reality.