How Inclusive Is India’s push for inclusive growth?

The paper is titled as  How Inclusive Is India’s Reform(ed) Growth? I just changed it a bit to make it more appealing.  It is written by Prof. M H Suryanarayana (surya.igidr@gmail.com) and Mousumi Das of IGIDR.

I am still reading the paper and is a fairly detailed one. But could not help posting given the insights.  The paper begins showing how the government has made efforts to push inclusive growth:

Ever since the inception of the era of economic reform, the Government of India (GOI) has claimed to have made conscious efforts to protect the interests of the d eprived by pursuing “Adjustment with a Human Face”. It has already completed its Eleventh Five-Year Plan: Towards Faster and More Inclusive Growth (GOI 2006) and has continued with a similar pursuit in the Twelfth Five-Year Plan: Faster, More I nclusive and Sustainable Growth (GOI 2013b). The general public perception about worsening economic plight of the masses has led the government to declare its commitment to the aamaadmi (common man) in general and the “poorest of the poor” in particular.1 Its policy response has been to provide for a variety of rights-based programmes under the Mahatma Gandhi National Rural Employment Guarantee Act, Right to Education and recently the National Food Security Act. So it would be worthwhile to examine how far the “poorest of the poor” have benefi ted from “inclusive growth”.

The authors say the focus on inclusive growth has hardly been inclusive:

This paper has examined inclusive outcomes in terms of some relative distributional measures based on estimates of per capita nominal consumption distribution as proposed in Suryanarayana (2008) using NSS data for 17 major states from 1993-94 to 2011-12. The different measures used for comparison are the elasticity of mean consumption with reference to per capita income, elasticity of median consumption with reference to mean consumption, inclusive coeffi cient and the FGT index computed with respect to 60% of the median.

At the all-India level we find that the relatively deprived social groups, STs and SCs, have been left out of the growth process and the OSGs perform the best. The same conclusion holds for both the rural and urban sectors at the all-India level with a decline in the extent of exclusive growth of the latter over time. An analysis across states and social groups show that the growth process was uneven during the reform period.

Of the deprived social groups, the OBCs are found to perform the best across almost all states and sectors. The post-reform growth has not led to a relative betterment of the deprived sections of the society.

Bihar and Gujarat, the focus states, retain their position at the lower and higher ends of the growth trajectory with the latter witnessing better inclusive growth. Our findings,in general, suggest that inclusiveness of the poorest in the Indian mainstream growth process is still a forlorn hope.

The paper has looked at many things as the conclusion suggests.

So have most gains only gone to the top bracket? Need to read in details.

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