Subject: Inclusive GrowthXSustainable Development

As per OECD, inclusive growth is economic growth distributed fairly across society and creates opportunities for all.

Inclusive Growth Promoting Inclusiveness

Expands economic opportunities with focus on education, health, skilling, and access to markets. Eg- PM-JANMAN for tribal inclusion.

Balanced regional growth with targeted interventions.

Income security – Social protection systems like MGNREGA, NFSA, PM-KISAN reduce vulnerability and support inclusive livelihoods.

Strengthens financial inclusion – Eg- PM Jan Dhan Yojana opened 500 million+ bank accounts

Equality of Opportunity – Eg- the Rights of Persons with Disabilities (RPwD) Act, 2016

Ayushman Bharat: Provided free healthcare to 23 crore people.

Inclusive Growth Ensuring Sustainability

Affordable and clean energy (SDG 7) – PM Ujjwala Yojana distributed 10 crore LPG connections

Encourages sustainable consumption and production patterns (SDG 12). Eg- Mission LiFE

Supports protection of natural resources-forests, soil, and biodiversity (SDG 15). Eg: Compensatory Afforestation Funds

Sustainable Livelihoods – Promotes climate-resilient agriculture, water conservation, and diversified livelihoods.

Institutional Sustainability (SDG 16, SDG 17) through decentralisation, cooperative federalism and data-driven governance. Eg- Aspirational Districts Programme.

Interlinking between Inclusiveness and Sustainability

Inequality weakens long-term economic growth

Environmental degradation hits the poorest hardest – Eg- Disaster induced Migration

Inclusive growth strengthens environmental stewardship

Sustainable livelihoods reduce vulnerability

Intergenerational equity depends on both

Challenges to Inclusive Growth under a Market Economy

Rising inequality– Eg- the top 1% control 40% of net personal wealth.

Regional disparities due to unequal investment and infrastructure. Eg- BIMARU States

Jobless growth – Service sector contributes 55% of GDP but employs less than 30% workforce

Weak social protection for informal workers (over 85% of India’s workforce).

Market failures in public goods. Eg- Digital Apartheid in Education

Way Forward

Capability Approach (Amartya Sen) – increase Education and health spending to 6% and 2.5% of GDP respectively

Strengthen progressive taxes, wealth taxes and targeted subsidies to reduce income inequality and expand welfare spending.

Align national policies with Paris Agreement targets

Universalise social security, pensions, maternity benefits, and unemployment allowance

A nexus approach towards sustainability and inclusiveness is needed for ‘Sabka Saath, Sabka Vikas.’

Inclusive growth and sustainable development emphasise fair distribution of opportunities, resources, and benefits both within the present generation and across future generations.

Intra-Generational Equity issues (Equity Within the Present Generation)

Income and Wealth Inequality – the top 1% of adults in India control almost 40% of net personal wealth. (World Inequality Report)

Social Exclusion – Caste, gender, disability, and minority identity restrict access to education, jobs, assets. Eg- Glass Ceiling for Women

Poorer communities face greater vulnerability to pollution, floods, heatwaves, violating equity. Eg- Disaster induced migration

Regional disparities – Eg- BIMARU States lag behind national averages in health, education and income.

Low female labour force participation (41% vs 48% global average) limits inclusive access to economic opportunities.

Inter-Generational Equity issues (Equity Across Future Generations)

Climate change burden on future generations – Eg- Rising sea levels threatening the survival of low-lying island countries.

Low social mobility- Eg – India ranks 76th in the Global Social Mobility Index (WEF), indicating persistence of inequality across generations.

Failing to invest in research, innovation, and human capital reduces competitiveness of future generations. (R&D investment only 0.7% of GDP)

Fiscal Burden – Unsustainable borrowing today limits fiscal space for future welfare and development spending.

Way Forward

Capability Approach (Amartya Sen) – increase Education and health spending to 6% and 2.5% of GDP respectively

Strengthen progressive taxes, wealth taxes and targeted subsidies to reduce income inequality and expand welfare spending.

Align national policies with Paris Agreement targets

Universalise social security, pensions, maternity benefits, and unemployment allowance

A nexus approach towards sustainability and inclusiveness is needed for ‘Sabka Saath, Sabka Vikas.’