Economy

Table of Contents

Inclusive Growth​ 2
Introduction​ 2
India’s Performance on various Inclusive Growth Indicators​ 3
Components of Inclusive Growth​ 4
Salient Features of Inclusive Growth​ 4
Strategy of Inclusive Growth (Objectives of inclusiveness and sustainability)​ 5
Need for Inclusive Growth​ 6
Inclusive growth and sustainability through inter and intra generational inclusiveness​ 7
Associated Challenges​ 8
Measures for Inclusive Growth​ 9
Recent Initiatives by government for Promoting Inclusive growth​ 11
Financial Inclusion​ 12
Analysis of PM-JDY as a tool for financial inclusion of Poor of Indian Society​ 15
Impact of Capitalism and Neo Liberal Policies (LPG reforms) in Inclusive Growth​ 16
Way Forward​ 17
We need I.N.C.L.U.S.I.V.E. growth​ 18
Bharatiya Model of Inclusive Development​ 20
Indic Market Economics​ 21
Antyodaya And Empowerment​ 23
Holistic Approach​ 24
Way Ahead​ 25

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Inclusive Growth

PYQs

1.​ W ith a consideration towards the strategy of inclusive growth, the new companies bill, 2013
has indirectly made CSR a mandatory obligation. Discuss the challenges expected in its
implementation in right earnest. Also discuss other provisions in the bill and their
implications. (2013)
2.​ Capitalism has guided the world economy to unprecedented prosperity. However, it often
encourages shortsightedness and contributes to wide disparities between the rich and the
poor. In this light, would it be correct to believe and adopt capitalism driving inclusive
growth in India? Discuss. (2014)
3.​ Pradhan Mantri Jan-Dhan Yojana (PMJDY) is necessary for bringing unbanked to the
institutional finance fold. Do you agree with this for financial inclusion of the poorer section of
the Indian society? Give arguments to justify your opinion. (2016)
4.​ Comment on the challenges for inclusive growth which include careless and useless
manpower in the Indian context. Suggest measures to be taken for facing these challenges.
(2016)
5.​ What are the salient features of ‘inclusive growth’? Has India been experiencing such a
growth process? Analyze and suggest measures for inclusive growth. (2017)
6.​ It is argued that the strategy of inclusive growth is intended to meet the objectives of
inclusiveness and sustainability together. Comment on this statement. (2019)
7.​ Explain intra-generational and inter-generational issues of equity from the perspective of
inclusive growth and sustainable development. (2020)
8.​ Is inclusive growth possible under market economy? State the significance of financial
inclusion in achieving economic growth in India. (2022)

Introduction

Inclusive growth is an economic model that ensures the equitable distribution of prosperity benefits
across all societal segments, aiming to reduce poverty and inequality by providing meaningful
opportunities for participation and contribution, regardless of one's economic, political, social, or
cultural background. According to the World Bank Inclusive Growth refers both to the pace and
pattern of growth, which are interlinked and must be addressed together. Indian model of inclusive
growth is based on the philosophy of Sabka Sath, Sabka Vikas, Sabka Vishwas, Sabka Prayas.
Rooted in collaborative governance, Indian model of inclusive growth aims to ensure that the
benefits of development reach every citizen equally.

Constitutional Provisions related to Inclusive Growth

●​ Article 38: Mandates the state to foster social order by promoting welfare and minimizing
income and status inequalities among people and groups.
●​ Article 39: Directs the state to ensure equitable distribution of resources and prevent the
concentration of wealth, promoting an adequate livelihood for all.
●​ Article 41: Requires the state to provide the right to work, education, and public assistance
for unemployment, old age, sickness, and disablement based on its capacity.
●​ Article 46: Aims to enhance the educational and economic well-being of Scheduled
Castes, Scheduled Tribes, and other weaker sections, protecting them from exploitation.
●​ Article 47: Obligates the state to improve public health and raise the nutrition and living
standards of its citizens.

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India’s Performance on various Inclusive Growth Indicators

Indicator Data/Valu Year/Source

e
Unemployment Rate 7.6% March 2024, Centre for Monitoring Indian
Economy (CMIE)
Labor Force Participation Rate 37% Periodic Labour Force Survey Report
(Women) 2022-23
Literacy Rate 77.7% 2017-18, National Statistical Commission
Financial Inclusion 60.1% RBI’s Financial Inclusion (FI) Index 2023
Performance w.r.t. Climate 7th Position Climate Change Performance Index (CCPI)
Change 2024
Gini Coefficient 0.4197 2022-2023

Parameter Description Data/Facts

Economic Growth GDP Growth Rate 7.6% in 2023-24, indicating robust economic activity
(Source: National Statistical Office)
Poverty Reduction in Decreased from 29.17% in 2013-14 to 11.28% in
Reduction Multidimensional 2022-23; 24.82 crore people moved out of poverty
Poverty (Source: NITI Aayog)
Human Human Development HDI value of 0.644 in 2022, placing India 134th
Development Index (HDI) globally (Source: UNDP)
Gender Inclusion Focus on Women's Over 430,000 individuals impacted by SIG's
Empowerment interventions, 62% women; 48% of 52,000+
enterprises women-owned (Source: UNDP)
Agricultural Insurance and Credit Pradhan Mantri Fasal Bima Yojana (PMFBY)
Development Inclusivity for Farmers covered 31.7 million farmers in 2022-23 (Source:
UNDP)
Education Access Quality and Enrolment rate in primary education reached 96%
Accessibility of by 2023 (Source: Ministry of Education)
Education
Healthcare Improvements in Ayushman Bharat scheme covered over 50 million
Accessibility Public Health people by 2024 (Source: Ministry of Health and
Infrastructure Family Welfare)
Employment Job Creation and Skill Skill India mission trained over 40 million people by
Opportunities Development 2023 (Source: Ministry of Skill Development and
Entrepreneurship)
Social Protection Access to Social National Social Assistance Programme expanded to
Security Schemes cover 20 million more individuals by 2024 (Source:
Ministry of Social Justice and Empowerment)
Urban Sustainable Urban Smart Cities Mission initiated 100 smart city projects
Development Growth and Smart focusing on sustainable urban planning (Source:
Cities Ministry of Housing and Urban Affairs)
Rural Enhancement of Pradhan Mantri Gram Sadak Yojana (PMGSY)
Development Rural Infrastructure connected 95% of habitations by roads as of 2024
and Services (Source: Ministry of Rural Development)
Environmental Green Energy National Solar Mission expanded solar capacity to
Sustainability Initiatives and 40 GW by 2024 (Source: Ministry of New and
Conservation Renewable Energy)

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Technological Digital Inclusion and Digital India initiative resulted in over 70% internet
Advancement Innovation penetration across rural and urban areas by 2024
(Source: Ministry of Electronics and Information
Technology)
Cultural Diversity Preservation and 'Ek Bharat Shreshtha Bharat' initiative enhanced
Promotion of Cultural inter-state cultural exchange (Source: Ministry of
Heritage Culture)

Income inequality in India

●​ As of 2022-2023, the top 1% of the population in India holds 22.6% of the country's
income and 40.1% of its wealth, which are the highest levels in the country's history. This
is also among the highest shares in the world, higher than South Africa and Brazil.
●​ The top 10% of the population holds 77% of the country's wealth, while the bottom 50%
only has 13%. The 90/10 ratio, which measures the ratio of the top 10% to the bottom
10% of incomes, increased from 6.7 in 2017-18 to 6.9 in 2022-23. (Source: World
Inequality Report 2022)

Components of Inclusive Growth

●​ Economic Inclusion: Enhancing access to jobs, markets, and fair compensation through
skills training and job creation.
●​ Social Inclusion: Ensuring equal access to essential services like education, healthcare,
and housing, particularly for marginalized groups.
●​ Institutional Inclusion: Improving governance to be responsive and accountable to all,
especially the marginalized and vulnerable.
●​ Financial Inclusion: Expanding access to financial services such as banking and insurance
to underserved populations.
●​ Technological Inclusion: Reducing the digital divide by ensuring universal access to digital
technologies and the internet.
●​ Gender Inclusion: Achieving gender equality in all spheres, allowing equal opportunities for
all genders.
●​ Geographic Inclusion: Promoting equitable development across all regions, addressing
disparities in infrastructure and investment.
●​ Political Inclusion: Ensuring that everyone has a voice in political processes and
policy-making, fostering fair governance.

Salient Features of Inclusive Growth

●​ Equitable Opportunities: Provides equal market accesand removes barriers for
marginalized groups.
●​ Poverty Reduction: Targets poverty through social safety nets, job creation, and better
access to education and healthcare.
●​ Sustainable Development: Focuses on environmentally friendly growth strategies.
●​ Comprehensive Employment: Creates productive and decent jobs, especially for
underprivileged groups.
●​ Social Inclusion: Ensures participation of all societal groups, including women, minorities,
and the disabled.
●​ Regional Balance: Reduces regional disparities in growth.
●​ Participation and Empowerment: Encourages stakeholder involvement in decision-making
processes.
●​ Access to Services: Ensures availability of essential services like health, education, and
finance to all.
●​ Good Governance: Promotes transparency, accountability, and efficiency in public
administration.

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Strategy of Inclusive Growth (Objectives of inclusiveness and sustainability)

Strategy of Inclusive Growth (Objectives of inclusiveness and sustainability)

Economic ●​ significantly expanded financial access, opening more than 50 crore

Inclusiveness bank accounts. This initiative has helped integrate a vast number of
Indians into the banking system, facilitating better savings, credit
availability, and financial security.
●​ MSMEs Support: The Micro Units Development & Refinance
Agency (MUDRA) continues to empower small businesses by
providing essential credit support, fostering grassroots-level
entrepreneurship and contributing to job creation.

Social ●​ Education and Skill Development: The Skill India Mission aims to
Inclusiveness train hundreds of millions, equipping them with skills relevant to
current industrial needs, thus enhancing employability and
productivity.
●​ Targeted Programs for Disadvantaged Groups: The Mahatma
Gandhi National Rural Employment Guarantee Act (MGNREGA)
supports rural households by providing guaranteed wage
employment, thus alleviating rural poverty and empowering
communities through consistent income.

Environmental ●​ Renewable Energy Projects: Aligning with the Paris Agreement

Sustainability goals, India targets a substantial increase in renewable energy
capacity, aiming for 175 GW by 2022, emphasizing the growth in
solar and wind energy sectors.
●​ Smart Cities Mission: This project plans to develop 100 smart
cities across India, focusing on sustainable urban living through
innovative and efficient infrastructure and services.

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Economic ●​ Infrastructure Development: Major infrastructure initiatives like the

Sustainability Bharatmala and Sagarmala projects enhance connectivity and
support economic activities across urban and rural areas, crucial for
holistic economic growth.
●​ Agricultural Reforms: The government's focus on stabilizing
agricultural income through various supports and reforms aims to
reduce dependency on unpredictable monsoon seasons and
enhance productivity.

Need for Inclusive Growth

Accessibility to ●​ There's a crucial gap in terms of accessibility and quality of core

Public Services public services like healthcare and education, as spending
remains low, which affects service delivery.
o​ Health Expenditure: India's spending on health as a
percentage of its GDP was 2.1% for the fiscal year 2023
according to budget estimates.
o​ Education Expenditure: the allocation for the education
and the higher education sector was just about 2.9% of
the country’s GDP for the fiscal year 2023. Countries such
as the United States and the United Kingdom spends 6%
& 4.2% of GDP on education.

Nutrition and Health ●​ India is still facing widespread health problems like malnutrition
and undernourishment, especially among marginalized sections
such as adolescent girls.
o​ The latest data from the National Family Health Survey-5
(NFHS-5) offers insights into malnutrition and
undernourishment among children in India: Stunting (low
height for age)- 35.5%, Wasting (low weight for
height)- 7.7%, Underweight children-32.1%.

Economic and ●​ There is significant intra-state and inter-state disparities reflected

Social Inequality in the Human Development and Per Capita Income in India,
demonstrating the urgent need for policies that foster equitable
growth.
o​ In the Human Development Report 2023-24, published
by UNDP, India ranked 134 out of 193 countries, showing
poor status of human development in India.
o​ There is a widespread inter-state disparity in terms of per
capita income. In 2020-21 (based on current price), Goa
topped the Per Capita Income list (₹4,31,351) while Bihar
was at the bottom (₹43,605).

Agricultural and ●​ The agricultural sector exhibits low growth rates and receives
Employment Issues inadequate policy attention. Moreover, employment quality is
poor, and there is a trend towards the casualization of labor,
which undermines job security and living standards.
o​ Informalization of Jobs: According to the India
Employment Report 2024, about 90% of workers are in
informal jobs. Additionally, while the share of regular

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employment had been rising since 2000, it began to

decline after 2018.

Rural-Urban Divide ●​ the gap between rural and urban areas in terms of access to
infrastructure, services, and opportunities.
o​ The "Internet in India Report 2023" notes that while
rural India has seen a surge in active internet users, their
access to digital services like digital payments remains
limited, with only about 36% of such users based in rural
areas.

Gender & Social ●​ Inclusive growth must address gender disparities and ensure
Inequalities equal opportunities for all social groups.
o​ On the Gender Inequality Index (GII) 2022, India ranked
at 108 out of 193 countries with a score of 0.437.

Sustainable ●​ Economic growth must be sustainable and environmentally

Development: conscious. Sustainable development is vital for inclusive growth &
long-term prosperity.
o​ As of the fiscal year 2023, a substantial 73% of the
country's electricity generation still comes from coal
and lignite sources.
o​ Lack of sustainable development leads to extreme
weather events affecting the poor and marginalized
population the most.

Trade and ●​ Enhancing trade competitiveness and effectively utilizing foreign

Investment direct investment and new technologies require a skilled labor
force, emphasizing the need for improved education and training
systems.
o​ According to the Human Development Report 2020,
only about 20% of India's labor force is classified as
"skilled."
o​ As per the India Skill Report 2023 reveals that only
50.3% of the young in the workforce are employable.

Inclusive growth and sustainability through inter and intra generational inclusiveness

●​ Intra-generational Equity: Intra-generational equity focuses on fairness among different

groups within the same generation, addressing disparities in access to resources,
opportunities, and outcomes.
o​ Examples:
▪​ Economic Policies: Progressive taxation and social welfare programs like
India's Direct Benefit Transfer (DBT) scheme redistribute wealth to support
marginalized groups.
▪​ Access to Services: The Right to Education Act ensures free education for
children, reducing educational disparities.
●​ Inter-generational Equity: Inter-generational equity ensures fairness in resource
distribution between current and future generations, vital for sustainable development.
o​ Examples:
▪​ Environmental Protection: Sustainable practices like afforestation and
renewable energy projects prevent resource depletion. For instance, the
National Solar Mission promotes solar energy use.

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▪​ Debt and Economic Policies: Fiscal prudence avoids high national debt,
preventing future economic burdens.
▪​ Climate Change: India's commitment to the Paris Agreement aims to cap
emissions and transition to renewable energy, ensuring a livable planet for
future generations.

Associated Challenges
●​ Historical Factors: Historical discrimination against certain social groups has limited their
access to education, employment, and healthcare, affecting their social, political & economic
mobility. Despite reservation policies post-independence, social upliftment has been minimal
and largely confined to limited economic and political successes.
●​ Poverty: Despite high growth rates, poverty remains widespread. It affects one’s ability to
access various services and resources available to make improvement in their living
standards.
o​ Despite improvements, India still has more than 230 million people who are poor as
per the UNDP Multi-dimensional Poverty Index 2023. 11.8% of people in India
were multidimensionally poor and deprived of nutrition in 2019/2021.
o​ India ranked 111 out of a total of 125 countries in the Global Hunger Index (GHI)
2023 highlighting the dire situation of hunger in India.
●​ Unemployment: The India Employment Report 2024 highlights that India's youth make up
about 83% of its unemployed, with those holding at least secondary education increasing
from 35.2% in 2000 to 65.7% in 2022.
●​ Income Inequality: According to Oxfam Report 2023, the top 10% of the Indian population
holds 77% of the total national wealth.
o​ 73% of the wealth generated in 2017 went to the richest 1%, while around 670 million
Indians who comprise the poorest half of the population saw only a 1% increase in
their wealth.
o​ 63 million of them are pushed into poverty because of healthcare costs every year -
almost two people every second.
●​ Social Exclusion: systematic marginalization of individuals or groups from societal
processes, which denies them the opportunities and resources that are normally available to
members of society and which are key to social integration. Certain groups like Scheduled
Castes (SCs), Scheduled Tribes (STs), women, and religious minorities often face exclusion
from economic, social, and political processes.
o​ Periodic Labour Force Survey (2022-23) indicates that Female Labor Force
Participation Rate (FLFPR) is at 37% only.
o​ According to the National Human Rights Commission, about 92% of transgender
individuals are excluded from economic activities, often leading to roles in begging or
sex work due to job denials despite qualifications.
●​ Overdependence on Agriculture & Issue of disguised unemployment: Though India is
striving to become the manufacturing hub of the world, a large workforce still depends of
Agriculture sectors for their livelihood.
o​ In the fiscal year 2022-23, agriculture sector contributed only around 15% to India’s
GDP (fiscal 2022-23) while providing employment to India’s 45.76% of the total
workforce.
●​ Jobless Growth: Despite India's GDP growing at an average rate of about 7% annually
over the past decade, employment growth has not kept pace, often remaining below 1%
according to the Centre for Monitoring Indian Economy (CMIE).
●​ Governance Issues: Corruption, inefficiency and mal-administration in governance have led
to misuse and misappropriation of resources allocated for the poor and marginalized,
negatively impacting the inclusive growth in India.
o​ Mal-administration and misuse oof healthcare resources during COVID-19 pandemic
led to unavailability of essential healthcare services, often resulting in loss of life of
the patients.

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o​ India ranked 93 out of 180 countries on the corruption perceptions index for 2023,
showing rampant state of corruption prevalent in the country.
●​ Social Norms and Discrimination: Persistent social norms and discrimination against
certain groups affect equal opportunity. For example, Cultural norms have traditionally
viewed females as subordinate to males, leading to restricted educational and employment
opportunities for women, thereby perpetuating economic dependence and limited societal
roles.
●​ Regional Disparities: States like Maharashtra and Tamil Nadu show higher GSVA in
services and industry, indicating robust economic activity, whereas states like Bihar and Uttar
Pradesh, although rich in agricultural output, lag in industrial and service contributions.
●​ Climate Change and Disasters: disproportionately affect the poor and marginalized
communities such as Tribals, Slum dwellers, Farmers etc. Climate led displacements have
become new normal resulting in further deterioration of condition of poor in India.
●​ Human Resource related challenges (Careless and Useless manpower)
o​ Skill Mismatch and Underutilization Workers in India often occupy jobs unsuitable
for their skill levels, leading to underutilization due to an educational emphasis on
rote learning.
o​ Unemployment and Underemployment High unemployment and underemployment
persist, especially among youth and graduates, as the formal sector fails to absorb
new entrants.
o​ Lack of Vocational Training and Education There's a pronounced gap in
vocational and technical education that aligns with industry demands, signaling a
need for educational reform.
o​ Labor Market Rigidities Stringent labor laws restrict employment growth in the
formal sector and encourage reliance on contract labor, resulting in job insecurity and
less training investment.
o​ Informal Sector Predominance A significant portion of the workforce is employed in
the informal sector, facing low job security, productivity, and wages.
o​ Economic and Social Barriers Caste and gender discrimination limit access to
quality jobs, exacerbating social and income inequalities.
o​ Lack of Entrepreneurial Support Potential entrepreneurial growth is hindered by
inadequate support in financing, infrastructure, and mentorship

Measures for Inclusive Growth

Land Reforms ●​ In the early years post-independence, India undertook

significant land reforms, including the abolition of zamindari
systems and the distribution of land to the landless, aiming to
reduce rural poverty and promote agricultural productivity.

Public Distribution ●​ Established nationwide to ensure food security for all, especially
System (PDS) the poor, by distributing subsidized wheat, rice, sugar, and other
essentials.

Five-Year Plans ●​ Initiated in 1951, these comprehensive development plans have

emphasized sectors such as agriculture, education, and health
to ensure balanced economic development across regions.

11th Five Year Plan ●​ Laid special emphasis on Inclusive Growth for the first time.
(2007-12)

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Twelfth Five Year ●​ Focuses on Growth which is: Faster, Inclusive, and Sustainable.
Plan

Nationalization of ●​ Aimed to extend banking services to rural areas, enhancing

Banks (1969) financial inclusion and ensuring that credit was available to the
underprivileged and rural sectors of the economy.

Green Revolution ●​ Boosted agricultural productivity in several states, leading to

(1960s-70s) increased food production and rural employment, thus reducing
food shortages.

Women ●​ Establishment of bodies such as the National Commission for

Empowerment Women (NCW) and the National Council for Empowerment of
Women to promote women's rights.

Gender ●​ Reservation of seats in Local Self Government Institutions to

Inclusiveness enhance gender inclusivity.

Reservation Policies ●​ Seats are reserved for Scheduled Castes, Scheduled Tribes,
and Other Backward Castes in educational institutions and
government jobs.

Political Inclusion ●​ Reserved seats in Parliament and State Assemblies for SCs and
STs to encourage political participation.

Minority Welfare ●​ Constitution of Minority Commissions to safeguard the interests

of minority communities.

Mid-Day Meal ●​ Launched to boost school attendance and nutrition among

Scheme (1995) children, especially in rural areas.

Mahatma Gandhi ●​ Guarantees 100 days of wage-employment per year to rural

National Rural households whose adult members volunteer to do unskilled
Employment manual work. This has been crucial in providing economic
Guarantee Act security to rural families. The scheme reserves at least 33% of
(MGNREGA, 2005) its benefits for women and also focuses on improving irrigation
facilities for Scheduled Castes and Scheduled Tribes.

Right to Education ●​ Mandates free and compulsory education to all children aged 6
Act (2009) to 14 years, aiming to improve literacy and educational
standards across the country.

Jan Dhan Yojana ●​ Aims to increase banking penetration, and ensure access to
(2014) financial services such as bank accounts, insurance, and
pensions.

Make in India (2014) ●​ Launched to encourage companies to manufacture in India and

incentivize dedicated investments into manufacturing. This
initiative also focuses on job creation and skill enhancement in

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Recent Initiatives by government for Promoting Inclusive growth

Agriculture
●​ Pradhan Mantri Kisan Samman Nidhi (PM-KISAN): Provides income support (Rs.
6000/year) to all landholding farmers' families to supplement their financial needs.
●​ Pradhan Mantri Fasal Bima Yojana (PMFBY): A crop insurance scheme to ensure that
farmers are financially supported in the event of failed crops due to natural calamities.
●​ Agricultural Mechanization: Provides financial assistance and subsidies for the purchase
of various agricultural machinery and equipment, encouraging modern farming techniques
and increasing farm output and efficiency.
Healthcare
●​ Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY): Offers health insurance
to over 500 million uninsured Indians, covering several medical procedures.
●​ National Health Mission: Aims to provide effective healthcare to rural populations with a
focus on accessibility, affordability, and quality.
●​ Telemedicine Initiatives: Under the Digital India umbrella, these initiatives aim to bridge the
rural-urban health divide by linking remote areas via telemedicine for consultations and
treatments.
●​ National Programme for Health Care of the Elderly (NPHCE): An initiative focused on
providing specialized and comprehensive healthcare to the elderly.
Education
●​ National Education Policy (NEP) 2020: Overhauls the Indian educational system to make
education more holistic, flexible, and aligned with the needs of the 21st century.
●​ Samagra Shiksha Abhiyan: An integrated scheme for school education extending from
preschool to senior secondary levels to ensure inclusive and equitable quality education.
●​ PM eVidya Initiative: a comprehensive effort to centralize and streamline all digital, online,
and broadcast educational resources, ensuring accessibility to quality education across
diverse geographies and demographics.
●​ SWAYAM Initiative: promotes inclusive growth by providing free online courses across
various subjects from school to postgraduate levels, ensuring that quality education is
accessible to everyone, regardless of their location or economic status.
Skill Development
●​ Skill India Mission: Targets skilling over 400 million people across India to make them
employable and economically productive.

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●​ Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Encourages aptitude towards

employable skills by providing monetary awards and certification.
Digital and IT
●​ Digital India: Aims to transform India into a digitally empowered society with a focus on
electronic public services.
●​ BharatNet: Seeks to connect rural areas with high-speed internet networks to promote
digital inclusivity.
●​ Common Service Centres (CSCs): These are access points for delivery of essential public
utility services, social welfare schemes, healthcare, financial, education, and agriculture
services, apart from a host of B2C services to citizens in rural and remote areas of the
country.
●​ UMANG App (Unified Mobile Application for New-age Governance): provides access to
a wide range of government services from Central, State, and Local Government bodies and
other citizen-centric services.
Financial Inclusion
●​ Jan Dhan Yojana: A nationwide scheme to ensure access to financial services, like banking
savings & deposit accounts, remittance, credit, insurance, and pension.
●​ MUDRA Yojana: Provides loans to micro and small enterprises operating in the
non-corporate small business sector.
Urban Development
●​ Smart Cities Mission: Focuses on developing 100 smart cities across India to promote
cities that provide core infrastructure, give a decent quality of life to their citizens, and apply
smart solutions to improve services and infrastructure.
●​ Atal Mission for Rejuvenation and Urban Transformation (AMRUT): Aims at
transforming urban living conditions through infrastructure upgrades and improved service
delivery in cities.
Energy and Environment
●​ Ujjwala Yojana: Provides LPG connections to BPL households to promote the use of clean
fuels.
●​ Solar Charkha Mission: Promotes green energy by setting up solar charkha clusters, which
provide sustainable employment and reduce the carbon footprint.
●​ International Solar Alliance: to promote inclusive growth by facilitating widespread access
to affordable, clean solar energy, thereby enhancing energy security and sustainable
development across its member countries.
●​ India's Nationally Determined Contributions (NDCs) under the Paris Agreement: also
promote inclusive growth by fostering job creation in green industries and ensuring
sustainable development that benefits all sectors of society.
Employment and Entrepreneurship
●​ Startup India: Supports entrepreneurship among the youth by simplifying the process of
starting a company and providing various incentives.
●​ Pradhan Mantri Employment Generation Programme (PMEGP): Aims to generate
self-employment opportunities through the establishment of micro-enterprises.

Financial Inclusion

Status of Financial Inclusion

Banking Services
●​ Account Ownership: The Pradhan Mantri Jan-Dhan Yojana has significantly expanded
banking access, with over 51 crore accounts opened and a total deposit balance of Rs.
2,08,855 crore as of November 2023​​.

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●​ Usage of Accounts: Despite the high number of accounts, about 4.30 crore remain
inactive with zero balance, highlighting challenges such as financial literacy and actual
usage​​.
Digital Payments
●​ Growth in Digital Transactions: Digital transactions, particularly through UPI, have
seen massive growth, increasing from 92 crore transactions in FY 2017-18 to 8,371 crore
in FY 2022-23​​.
Credit Accessibility
●​ Credit to Vulnerable Groups: Access remains limited for small farmers, entrepreneurs,
and low-income households, with some support from microfinance institutions and
NBFCs.
●​ Microcredit Schemes: Government initiatives like the Mudra Yojana are crucial,
consistently disbursing substantial funds to support small businesses annually.
Insurance and Pension
●​ Insurance Coverage: As of 2023, insurance penetration in India is 4% of GDP, with life
insurance at 3% and non-life insurance at 1%. This reflects steady but slow growth in the
sector, with substantial room for improvement to match global averages​
●​ Pension Schemes: Coverage remains notably sparse, particularly among informal
sector workers, highlighting a significant area for policy enhancement.

Significance of financial Inclusion

●​ Household Welfare: Improved service access in rural areas enhances income management
and savings​​.
●​ Entrepreneurship: Fintech innovations increase access to financial services, crucial for
small businesses​
●​ Women's Empowerment: Policies aim to boost financial awareness among women,
supporting economic independence​.
●​ Financial Stability: Enhanced customer protection frameworks stabilize the financial
markets​​.
●​ Economic Output: A significant improvement in the Financial Inclusion Index indicates
broader financial service utilization​​.
●​ Poverty Reduction: Achieving an 80% financial inclusion rate has significantly impacted
poverty and inequality reduction​​.
●​ Digital Advancements: Digital financial services growth supports the Digital India initiative​.
●​ Formal Financial Channels: Improved formal financial infrastructure reduces dependence
on informal services​​.
●​ Government Services: Efficient direct benefit transfers and grievance redress mechanisms
improve service delivery​​.
●​ Financial Literacy: Enhanced tools and approaches are being developed to improve
financial literacy, particularly in digital services​​.
●​ Agricultural and Microfinance Support: Financial inclusion supports agricultural
development and strengthens MFIs​​.
●​ Economic Recovery and Sustainability: Financial inclusion aids in economic recovery and
promotes sustainable development through better regulation and technology use​​.

Strengths
●​ Government Initiatives: The Pradhan Mantri Jan-Dhan Yojana has successfully opened
over 51 crore accounts, drastically improving banking access across India. Similarly, the
Mudra Yojana has effectively extended credit to small enterprises, disbursing significant
funds annually.
●​ Technological Integration: Digital platforms like the Unified Payments Interface (UPI) have
transformed banking, facilitating billions of transactions and significantly enhancing user
engagement across various demographics.
Challenges

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●​ Financial Literacy: Financial literacy remains low, especially in rural areas, limiting effective
utilization of financial services. The need for tailored educational programs is acute to bridge
this gap.
●​ Rural Penetration: Despite the growth in digital banking solutions, the physical banking
infrastructure in remote areas lags, impacting the delivery of financial services where
branches and ATMs are still crucial.
●​ Gender Gap: Financial inclusion rates for women trail those of men, underscoring persistent
socio-economic barriers. Initiatives like the Bharatiya Mahila Bank and targeted microfinance
projects are in place, but greater efforts are needed.
●​ Quality of Services: The reliability and quality of financial services in semi-urban and rural
areas are problematic, with frequent service disruptions and inadequate customer support
diminishing trust and usage.

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Analysis of PM-JDY as a tool for financial inclusion of Poor of Indian Society

Achievements:
●​ Financial Inclusion:
o​ Over 50 crore accounts opened as of August 2023, with deposits totaling over ₹1.75
lakh crore.
o​ Millions of previously unbanked individuals, especially in rural areas, now have
access to banking.
●​ Direct Benefit Transfers (DBT): Crucial for DBT initiatives, ensuring subsidies and welfare
benefits are directly credited to beneficiaries, reducing leakage and corruption.
●​ Financial Literacy: Programs educate the poor on banking, savings, and financial products,
increasing awareness and participation in the formal financial system.
●​ Insurance and Pension Schemes:
o​ Account holders eligible for Pradhan Mantri Suraksha Bima Yojana (PMSBY) and
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), providing accidental and life
insurance.
o​ Linked with Atal Pension Yojana (APY) to promote retirement savings among
unorganized sector workers.

Challenges and Limitations:

●​ Dormant Accounts: Many PMJDY accounts remain inactive, raising concerns about their
actual utilization.
●​ Limited Access to Credit: Credit disbursement to PMJDY account holders is limited, with
banks perceiving them as high-risk due to low income and lack of credit history.
●​ Operational Challenges: Issues like biometric authentication failures, inadequate physical
banking infrastructure, and connectivity problems in remote areas persist.
●​ Financial Literacy Gaps: Significant gaps remain, with many account holders lacking the
understanding to fully utilize available financial services.
●​ Exclusion of the Ultra-Poor: The ultra-poor, often lacking necessary documents or minimal
required balance, still find it difficult to open and maintain accounts, leaving them excluded
from formal financial services.

Inclusive Growth through CSR Provisions

●​ Addressing Social Inequalities: CSR activities targeting hunger, poverty, and malnutrition
address basic human needs, reduce social inequalities, and enhance the quality of life for
marginalized communities.
▪​ Tata Chemicals: Their "Okhai" initiative supports rural artisans, reducing poverty
and improving living standards.
▪​ Reliance Foundation: Their nutrition projects have benefited over 2 million children
and mothers, reducing malnutrition rates.
●​ Promoting Education and Skills Development: By investing in education and vocational
training, companies help build a skilled workforce, improve employability, and promote
economic inclusion.
▪​ Infosys Foundation: They have built libraries, funded schools, and provided
scholarships, benefiting over 13,000 students annually.
▪​ Larsen & Toubro (L&T): Their vocational training centers have equipped over
50,000 youth with employable skills.
●​ Empowering Women and Promoting Gender Equality: CSR initiatives focusing on gender
equality and women's empowerment contribute to social inclusion by providing opportunities
for women to participate in economic activities.
▪​ Hindustan Unilever’s Project Shakti: Empowers rural women by training them to
become micro-entrepreneurs.
▪​ PepsiCo: Their programs have reached over 50,000 women, offering training in
agriculture, business skills, and leadership.

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●​ Environmental Sustainability: CSR projects promoting environmental sustainability ensure

economic development does not come at the cost of environmental degradation, benefiting
both current and future generations.
▪​ ITC Limited: Their projects focus on watershed development, afforestation, and
sustainable agriculture, benefiting over 6 million farmers.
▪​ Wipro: Their sustainability initiatives include reducing carbon footprint and water
conservation.
●​ Rural Development: Supporting rural development projects helps bridge the urban-rural
divide, promoting balanced regional development and ensuring that growth benefits rural
areas.
▪​ Mahindra & Mahindra: Their "Project Hariyali" has planted over 18 million trees,
improving rural landscapes and providing sustainable livelihoods.
▪​ Aditya Birla Group: Their initiatives in healthcare camps, education programs, and
infrastructure development have transformed the lives of over 7.5 million people in
rural areas.

Impact of Capitalism and Neo Liberal Policies (LPG reforms) in Inclusive Growth

Positive Impacts
●​ Economic Growth
o​ GDP Growth: India's GDP growth for 2022-23 was 7.0%, with projections for
2023-24 at 7.6%, indicating sustained robust performance​​.
o​ Foreign Direct Investment (FDI): Although specific figures for 2023 are not
available, ongoing economic momentum suggests a positive environment for foreign
investment.
●​ Job Creation : The IT and service sectors expanded significantly, with services like finance
and real estate growing by 12.2% in early 2023, reflecting strong job creation potential​​.
●​ Infrastructure Development: The National Infrastructure Pipeline, with plans to invest $1.4
trillion by 2025, supports sustained economic growth and regional job creation.
●​ Health and Education: Spending in these crucial sectors remains below 3% of GDP each,
with potential for increase aligned with ongoing economic growth.

Negative Impacts
●​ Income Inequality and Regional Disparities
o​ Wealth Distribution: The richest 1% of Indians own 40.1% of national wealth,
indicating extreme wealth concentration, much higher than in countries like the US or
Brazil​.
o​ Access to Services: Disparities are evident in healthcare and education, with millions
unable to afford necessary healthcare, pushing many into poverty annually​(Oxfam
International)​.
●​ Labor Market Issues
o​ Precarious Employment: A significant portion of the workforce in the informal sector
lacks job security and social benefits, impacting economic stability​​.
o​ Gender Disparities: Women face higher unemployment and underemployment, often
in insecure and lower-paying jobs​(Oxfam International)​.
●​ Environmental Concerns
o​ Resource Depletion and Pollution: Overexploitation of resources and inadequate
urban planning have led to severe environmental degradation, particularly in urban
areas like Delhi​​.

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Way Forward
●​ Enhance Educational Access and Quality: Fully implement the National Education Policy,
focusing on vocational training, instruction in vernacular languages, and strengthening
school complexes.
o​ Expand digital education platforms like SWAYAM and DIKSHA to improve
educational outreach, particularly in remote areas.
●​ Increase Social Welfare Funding: Boost social welfare spending by utilizing funds from
disinvestment proceeds. Foster partnerships with the civil society and corporate sector to
enhance contributions to social programs.
●​ Expand E-Governance and Digital Services: Accelerate the deployment of digital
infrastructure to ensure that services like e-Learning, e-Governance, and telemedicine are
accessible in the remotest parts of the country. Example: The e-Sanjeevani platform's
success in providing healthcare solutions remotely.
●​ Bridging Rural-Urban Divide: To bridge the rural-urban divide for inclusive growth in India,
key strategies include improving infrastructure like roads and digital connectivity, enhancing
access to quality education and healthcare, and supporting rural economies through
agricultural hubs and MSME development.
o​ Household Consumption Expenditure Survey of 2022-23 highlights that
rural-urban divide in MPCE (Monthly Per Capita Consumption Expenditure) has
decline considerably.
o​ Within rural and urban areas, the consumption of the lowest 5% of the MPCE
population grew at a faster rate than the top 5%, pointing to a decline in economic
inequality.
●​ Address intra-generational and inter-generational issues of equity: Inclusive growth in
India necessitates addressing both intra-generational and inter-generational equity.
o​ Intra-generational equity refers to fairness among individuals within the same
generation, focusing on reducing disparities in current populations. For ex: disparity
between urban and rural populations in terms of access of various services and
opportunities.
o​ Inter-generational equity looks at fairness across different generations, ensuring that
future generations inherit a sustainable world.
●​ For example, the current exploitation of natural resources compromises the
ability of future generations to meet their needs.
●​ Reform Key Sectors: Undertake systemic reforms in labor laws, agriculture, and land
acquisition in a manner that respects democratic consensus and promotes fair practices.
o​ Encourage states to adopt model agricultural laws that increase farmers' income and
provide more market freedom.
●​ Support Innovation and Research: Enhance funding and policy support for startups and
research institutions. Establish innovation hubs and incubators in collaboration with leading
academic institutions and industry leaders.
●​ Promote Employment Generation: Incentivize sectors with high employment potential like
manufacturing and services through subsidies, tax breaks, and infrastructure support.
Support small and medium enterprises (SMEs) through easier credit facilities and market
access.
●​ Strengthen Social Protection Programs: Extend and deepen the reach of MGNREGA and
the Public Distribution System to cover more vulnerable populations.
o​ Improve healthcare coverage under schemes like PMJAY to include more diseases
and higher reimbursement for medical expenses.
●​ Drive Financial Inclusion: Expand the reach of financial services to unbanked areas,
promoting schemes like Pradhan Mantri Jan Dhan Yojana.
o​ Leverage technology to provide mobile banking services, ensuring that financial
products are accessible to all.

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●​ Empower Women Economically: Implement and enforce policies that support women’s
participation in the workforce, such as equal pay, maternity benefits, and anti-discrimination
laws.
o​ Promote women-led enterprises through dedicated financial products and marketing
platforms.
o​ Utilize successful models like Kerala’s Kudumbashree, a community-based women
empowerment project, as a template for other states.
●​ Modernize Agriculture: Support precision agriculture techniques and sustainable practices
to increase productivity. Improve rural infrastructure like roads and storage facilities to
reduce post-harvest losses.
●​ Inclusive Governance: Enhance citizen participation, boost transparency, and combat
corruption. Strengthen local self-governments and engage marginalized groups in
policy-making.
o​ The Union Budget 2024 prioritizes inclusive development as its foremost goal, one
of the seven key objectives for the "Amrit Kaal" period.
o​ It aims to promote inclusive growth for youth, women, farmers, OBCs, Scheduled
Castes and Tribes, the differently abled, economically weaker sections, and other
marginalized groups.
●​ Private Sector Engagement: Promote Corporate Social Responsibility (CSR) that targets
inclusive growth. Motivate private sector investment in community development and social
initiatives.
●​ Sensitization and Awareness: Increase public understanding and sensitivity towards
inclusivity and equality. Implement campaigns and educational programs to challenge
stereotypes and discrimination.

We need I.N.C.L.U.S.I.V.E. growth

●​ I - Inclusion of all (SDG 10: Reduced Inequalities): Emphasizing social, economic, and
political inclusion of all irrespective of age, sex, disability, race, ethnicity, origin, religion, or
economic status, supported by "Pradhan Mantri Jan Dhan Yojana" for financial inclusion.
●​ N - Nutrition and food security (SDG 2: Zero Hunger): Addressing hunger and promoting
sustainable agriculture through initiatives like the "National Food Security Act."
●​ C - Care for health (SDG 3: Good Health and Well-being): Enhancing healthcare
accessibility and quality through "Ayushman Bharat" and "Mission Indradhanush" for
vaccination coverage.
●​ L - Learning opportunities (SDG 4: Quality Education): Ensuring inclusive and equitable
quality education and promoting lifelong learning opportunities via "Sarva Shiksha
Abhiyan" and "Skill India."
●​ U - Upliftment of women (SDG 5: Gender Equality): Promoting gender equality and
empowering all women and girls through "Beti Bachao, Beti Padhao" and the "Nirbhaya
Fund."
●​ S - Sustainable economic growth (SDG 8: Decent Work and Economic Growth):
Encouraging sustained, inclusive economic growth and full and productive employment with
"Make in India" and supporting youth employment through "National Youth Empowerment
Scheme."
●​ I - Inequality reduction (SDG 10: Reduced Inequalities again): Focusing on empowering
and promoting the inclusion of all, especially marginalized groups such as SC, ST, OBC, and
minorities, with laws like the "Scheduled Castes and Tribes (Prevention of Atrocities)
Act."
●​ V - Viable urban development (SDG 11: Sustainable Cities and Communities): Aiming to
make cities inclusive, safe, resilient, and sustainable with the "Smart Cities Mission" and
improving housing conditions through "Pradhan Mantri Awas Yojana."
●​ E - Equitable justice and strong institutions (SDG 16: Peace, Justice, and Strong
Institutions): Promoting peaceful and inclusive societies, providing access to justice for all,

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and building effective, accountable institutions at all levels through "Digital India" and
oversight by the "Central Vigilance Commission."

World Economic Forum (WEF) on Promoting Inclusive Growth

World Economic Forum recommended following three steps to promote social inclusion and
economic growth:
●​ Capacity Building: Governments should enhance the skills of their citizens to foster public
and private investment, crucial for boosting productivity growth sustainably.
●​ Labor Regulation Modernization: It is important for governments to update labor laws and
cooperate with employer and worker groups. This impacts employment, compensation
distribution, purchasing power, and overall economic demand.
●​ Investment in Social Benefits: Governments need to increase public and private
investments in labor-intensive sectors such as sustainable infrastructure, water, electricity,
digital platforms, transportation, healthcare, and education. This will provide widespread
social advantages.

NITI Aayog on Achieving Inclusive Growth

NITI Aayog in its Strategy for New India @75 provided a blueprint for achieving inclusive growth in
India. Key recommendations are-
●​ To have an inclusive development in the cities to ensure that urban poor and slum dwellers
including recent migrants can avail city services.
●​ To make schools more inclusive by addressing the barriers related to the physical
environment (e.g. accessible toilets), admission procedures as well as curriculum design.
●​ To make higher education more inclusive for the most vulnerable groups.
●​ To provide quality ambulatory services for an inclusive package of diagnostic, curative,
rehabilitative and palliative care, close to the people.
Conclusion
India's commitment to inclusive growth aligns with Sustainable Development Goals, constitutional
values, and national policies like 'Sabka Saath Sabka Vikas', targeting a poverty rate reduction to
about 5%. This progress reflects robust policy initiatives across states such as Uttar Pradesh, Bihar,
and Madhya Pradesh, significantly lifting millions from multidimensional poverty​​. Looking ahead,
continued efforts towards economic equity and social welfare are key to achieving sustainable and
inclusive development for all citizens.

International Best Practices of Inclusive Development

●​ Singapore’s Skill’s Future initiative: focuses on continuous learning where citizens receive
credits to attend courses that improve their job prospects.
o​ This program supports career transitions and upskilling, adapting to technological
changes and global economic shifts.
●​ Social Business and Entrepreneurship (Bangladesh): The concept of social business
popularized by Nobel Peace Prize laureate Muhammad Yunus in Bangladesh, focuses on
solving social problems through business techniques, including microfinance and social
entrepreneurship.
o​ These businesses reinvest profits to expand their reach and improve the community,
promoting sustainable economic development.
●​ South Korea’s extensive investment in digital infrastructure and education: ensures
widespread internet access and technological literacy.
o​ The government supports programs to ensure elderly citizens and other vulnerable
groups are not left behind in the digital era, promoting participation and access to digital
services.
●​ Conditional Cash Transfers (Brazil and Mexico): Programs like Brazil’s Bolsa Família and
Mexico’s Oportunidades provide financial aid to poor families under the condition that they

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comply with certain requirements, such as ensuring children attend school and receive
vaccinations.
o​ These programs have significantly contributed to reducing child labor, improving
educational outcomes, and enhancing health conditions among the poorest populations.
●​ Germany’s social urban development programs focus on revitalizing underdeveloped areas
without displacing local populations.
o​ These initiatives promote social mixing, improve local infrastructure, and enhance public
services, ensuring that all residents benefit from urban improvements.

Case Studies on Inclusive Growth in India

●​ Kerala's Kudumbashree Program: launched in 1998, it is a women-focused community
program combining microfinance with social development, impacting over 4 million members
and covering more than 50% of households to enhance women's empowerment and financial
inclusion in Kerala.
●​ Gujarat's Jyotigram Yojana: Launched in 2003, it ensures a three-phase power supply to rural
areas, separating agricultural from domestic lines, enhancing quality of life, agricultural
productivity through better irrigation, and boosting rural non-farm activities.
●​ Telangana's Mission Kakatiya: Launched in 2015, Mission Kakatiya aims to restore minor
irrigation tanks and lakes, enhancing agricultural productivity through improved water retention
and irrigation. It has rejuvenated 46,531 tanks, increasing water storage, benefiting agriculture,
and aiding in groundwater replenishment and sustainable water management.
●​ Tamil Nadu’s Amma Canteens: Launched in 2013, Amma Canteens provide highly
subsidized, nutritious food to urban poor in Tamil Nadu, targeting daily wage laborers, rickshaw
pullers, and the homeless.
●​ Telangana’s Rythu Bandhu Scheme: Started in 2018, this scheme provides financial support
to farmers to cover the initial investment needs for each crop cycle, thereby minimizing
debt-related issues. The scheme benefits around 5.8 million farmers, providing them with
₹5,000 per acre per season to support their farming activities.

Bharatiya Model of Inclusive Development

The Bharatiya Model of Inclusive Development is grounded in India's cultural-historical roots and
emphasises an indigenous approach to development. It includes the significance of family and community
in economic and social roles, focusing on "sustained, fast, and inclusive growth" which aims for the
all-around development of society and empowerment of every citizen.

Three main pillars of The Bharatiya Model of Inclusive Development

Indic Market ●​ This pillar is characterised by a balanced interplay between private

Economics enterprises and market forces, with selective government intervention
aimed at promoting inclusive growth and public welfare.
●​ It seeks to find an optimal balance between a socialist and ultra-capitalist
economy, promoting private initiative and competition as drivers of growth
and productive employment.

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●​ The government plays a role in creating an environment where

entrepreneurship can thrive across all communities and regions.

●​ Antyodaya refers to “caring for the most disadvantaged in society, while

Antodaya & empowerment involves providing everyone an opportunity to develop
Empowerment their talents and income-generating capabilities.”
●​ The approach includes providing equal opportunities for learning and earning
to all sections and regions, reaching out to the most deprived in society.
●​ This concept is deeply rooted in India's cultural history and is adapted to
modern contexts, with a focus on social compassion and empowerment
through recognition and celebration of India's heritage.

Holistic ●​ This pillar involves addressing issues based on experience-based

Approach pragmatism and covers macroeconomic management, fiscal policy,
trade and industrial policy, agriculture policy, monetary and credit
policy.
●​ The holistic approach integrates various aspects of social welfare and
economic growth, focusing on improving indicators like multidimensional
poverty, female workforce participation rate, and gender balance.

The model reflects a commitment to inclusive development that leverages India's historical and cultural
strengths, fostering a system where empowerment and equality of opportunity are central to economic and
social progress.

Indic Market Economics

Role of Private ●​ The private sector plays a crucial role as the driver of growth and
Sector productive employment.
●​ Business enterprises, ranging from companies to micro, small, and medium
enterprises, as well as both domestic and foreign businesses, are pivotal in
producing and selling goods and services and generating jobs.
●​ The government aims to create an economic and social environment
conducive to entrepreneurship, enabling it to thrive and grow across various
communities and regions.

Role of Private ●​ Private social initiatives, including NPOs and NGOs, are essential in a
Social democracy. They can supplement governmental efforts, especially in
Initiatives providing a personal touch required in community-level interactions.
●​ These organizations are effective in areas where the government may not
efficiently deliver basic services to less advantaged members of society.
●​ The government provides financial support but acknowledges that
bureaucracies are not always effective at delivering personal and emotional
support.

Why ●​ The government monopoly over resources and economic activities leads to
Government inefficiency due to the inherently risk-averse nature of government
Must Not Be in structures.
Business ●​ Phrases like "Government has no business to be in business" and
"minimum Government maximum governance" capture the idea that

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excessive government involvement can crowd out private initiative, which is

typically more effective and sustainable.

Advantages ●​ This approach blends flexibility with market economics and addresses
and Issues of market failures, externalities, and information asymmetries.
the Approach ●​ It considers issues such as market competition, public goods provision, and
the importance of capital and entrepreneurship.
●​ It promotes a balanced interplay between private enterprise and selective
government intervention.

Middle Path ●​ The Indic Market Economy charts a middle path between a
Approach communist-socialist, command-and-control economy and an
ultra-capitalist one.
●​ It seeks a balance where individual initiative drives growth, while the
government acts as an enabler and facilitator, ensuring equal
opportunities for all.

Creation of ●​ By promoting private sector involvement, the government has created space
More Space to focus on areas the private sector is unable or unwilling to address, such
for as public goods provision and infrastructure regulation.
Government ●​ This unbundling allows the government to efficiently manage infrastructure
needs while leveraging private sector capabilities.

Impact on ●​ An unbundling of infrastructure into components that can be managed

Infrastructure competitively.
●​ Private sector involvement is encouraged in areas like mobile telecom
infrastructure and electricity generation, while the government remains
involved in core public goods like local roads.
●​ Public-private partnerships (PPPs) are used for various infrastructure
projects like railways, airports, and ports.

Government ●​ The government has undertaken numerous reforms in digital public goods,
Reforms in such as the development of the Unique ID (Aadhar), UPI, and various digital
Digital Public platforms. Human capital development is emphasized through platforms like
Goods and Skilling India and E-Pathshala.
Other Areas ●​ Innovation and entrepreneurship are fostered through initiatives like the Atal
Innovation Mission and various start-up schemes. Macroeconomic
reforms include GST, flexible inflation targeting, and bankruptcy codes.

Impact of ●​ While the full effects of the recent reforms will take time to manifest, some
These outcomes, such as improvements in poverty indicators and workforce
Reforms participation, are already emerging.
●​ The reforms aim to create a competitive economy, stimulate innovation, and
ensure inclusive growth across various sectors.

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Antyodaya And Empowerment

Philosophical ●​ The philosophical underpinning of Antodaya and Empowerment is deeply

Underpinning rooted in the concept of caring for the most disadvantaged in society and
providing equal opportunities for all. Antodaya, meaning upliftment of the
last person, is a philosophy that was articulated by Shri D. D. Upadhyaya as
"Integral Humanism."
●​ This philosophy emphasizes socio-economic development, focusing on the
lowest rungs of society, and was influenced by Mahatma Gandhi's principle
of considering the impact of actions on the poorest individual.
●​ The approach aims for social empowerment and mutual empathy, celebrating
diverse cultural, spiritual, and occupational achievements.

Broad ●​ The Bharatiya model of development, particularly the pillar of Antodaya &
Approach: Empowerment, focuses on empowering every section and region of society
through providing equal opportunities to learn and earn.
●​ This is a shift from merely provisioning basic needs to ensuring participation
of all stakeholders and reaching out to the most deprived.
●​ The approach is inclusive, aiming for sustained, fast, and inclusive growth
where empowerment and equality of opportunity are central themes.

Names of ●​ PM-JAY (Pradhan Mantri Jan Arogya Yojana): Provides health insurance
Government covering 100 million poor families with a cover of Rs 500,000 per family for
Schemes with hospitalization, impacting about 550 million beneficiaries.
Their Impacts ●​ Ujjwala Yojna: Brought cleaner cooking fuel to households, reducing
in Various dependence on polluting wood stoves or kerosene.
Sectors ●​ Swachh Bharat Mission: Ensured access to toilets, significantly improving
public health infrastructure.
●​ Indicators of Multidimensional Poverty: Between 2015-16 and 2019-21,
there has been a decline in poverty-related indices, such as sanitation
(-21.8%), electricity (-8.9%), and nutrition (-6.1%).

How Has ●​ Deendayal Antodaya Yojna was integrated into the SGSY in 2015.
Prioritisation of ●​ Mid-day Meal Scheme relaunched as PM-Poshan.
Programs ●​ The approach has shifted towards outcome-oriented programs like Swachh
Changed Over Bharat Mission and Jal Jeevan Mission
Time

New ●​ Jan Dhan scheme and the JAM Trinity: Focused on financial inclusion.
Programmes ●​ PM Saubhagya: Sahaj Bijli Har Ghar Yojna: Ensures electricity connections
Introduced to every household.
●​ Bharat Lamp Yojna: Promotes energy-efficient lighting.
●​ Deendayal Upadhyaya Gram Jyoti Yojna: Focuses on rural electrification
●​ PM Saubhagya Sahaj Bijli Har Ghar Yojana: Aims for universal electricity
connections.
●​ Unnat Jyoti by Affordable LEDs for All: Provides energy-efficient LED
bulbs to domestic consumers.
●​ Pradhan Mantri Awas Yojna (PMAY): Affordable housing by the year 2024.

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●​ Swachh Bharat Mission: A national campaign to clean the streets, roads,

and infrastructure of the country.
●​ Jal Jeevan Mission and Har Ghar Jal: Safe and adequate drinking water
through individual household tap connections by 2024
●​ Rashtriya Gram Swaraj Abhiyan (RGSA): Addresses village development
●​ Svamitva Yojna:
●​ Sansad Adarsh Gram Yojana (SAGY): Aims to develop model villages
●​ PM Jan Vikas Karyakram (PMJVK): Focuses on multi-sectoral development
●​ Pradhan Mantri Jan Arogya Yojna (PMJAY): Provides cashless access to
healthcare services.
●​ Ujjwala Yojna: Clean cooking fuel in the form of LPG
●​ Jan Dhan-Aadhar-Mobile (JAM) Trinity: To reduce leakage of government
subsidies.
●​ Deendayal Antodaya Yojna (DAY): To uplift poor by enhancing sustainable
livelihood
●​ MUDRA Yojna (PMMY): Credit to small entrepreneurs

Equality of ●​ India's approach to equality of opportunity involves empowering diverse

Opportunity groups and ensuring differential opportunities across various regions. This is
and India's done through a saturation approach with layered schemes targeting
Approach disadvantaged groups.
●​ The belief is that personal motivation and hard work are crucial once equal
opportunities are provided, reflecting a large overlap between empowerment
and social welfare.

Output and ●​ Beti Bachao, Beti Padhao: Aims to address gender imbalance and empower
Outcome in women.
Terms of ●​ Mission Shakti: Focuses on women's empowerment.
Gender

Holistic Approach

Philosophical ●​ India’s approach to macroeconomic management is holistic and is deeply

Underpinnings rooted in its spiritual philosophy and civilizational culture. The concept
of the oneness of humanity is encapsulated in the phrase "Vasudeva
Kodambakkam."
●​ This tradition fosters a pragmatic approach to addressing complex and
interconnected issues, combining logic and empiricism with deeper intuition
derived from reflection or meditation

Example of ●​ The holistic approach to the 'Green Economy' in India is exemplified by

Green Economy initiatives like the International Solar Alliance, the promotion of renewable
and technology, and the 'Lifestyles for Environment' (LIFE) program.
Macroeconomic ●​ These initiatives include measures such as replacing water-intensive
Management cereals with water-efficient millets and substituting carbon-intensive meat
products with healthy vegetables and fruits.
●​ Additionally, there is an emphasis on replacing throwaway products with
repairable and/or recyclable household equipment.

India’s Holistic ●​ India's macroeconomic management is characterized by openness to all

Approach to theories, empirical evidence, and experiences from other countries, while

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Macroeconomic remaining rooted in its own economic, social, and cultural realities.
Management ●​ The government prioritizes experience and evidence over ideology, and the
approach involves iterative policy-making with feedback loops to improve
policies.

Inflation ●​ The holistic-pragmatic macroeconomic management has led to a decline in

Targeting and CPI inflation from 9.4% in the quarters leading to Q1 of FY15 to 5.1% in
Banking the subsequent quarters, and even further to an average of 4.9%
despite the pandemic.
●​ This approach has also contributed to reducing BOP imbalances, gross
and net NPAs in the banking system, and strengthening corporate balance
sheets.

Investment and ●​ The Indian approach has led to signs of positive effects on investment and
Productivity productivity. The real investment rate (GFCF/GDP) in 2022-23 is at 34%,
close to its peak of 34.3% in 2011-12.
●​ The average investment rate during FY15 to FY23 is higher than the
previous decade, indicating a recovery and upward trend in fixed
investments.

Alignment with ●​ India's trade policy has evolved from "Make in India" to "Atma Nirbhar"
Trade and and includes Free Trade Agreements (FTAs) with developed countries,
Industrial Policy reflecting a pragmatic approach.
●​ The experience of other nations shows the benefits of a broadly free trade
policy with selective protections, aligning with India's holistic and pragmatic
approach.

Way Ahead

Digital Systems ●​ India is pioneering the use of digital systems, particularly in developing
digital public goods. The evolution of India's model of inclusive development
over the next decade will involve developing digital and hybrid systems for
economic, technological, and social transformation.
●​ The focus is on integrating digital systems to enhance economic growth and
social welfare.

AI ●​ The focus of AI in India should be on developing expert systems to elevate

the skill levels of workers.
●​ This will enable low-skill workers to perform at a middle-skill level and
middle-skill workers to achieve high-skill performance, meeting the demand
for skills in India and globally.

Universal ●​ Universal access to digital connectivity is critical for India to become a

Access global supplier of skills and social e-services.
●​ This involves ensuring 100% digital connectivity across all villages and
public institutions, providing free access to students in government schools
and health centers, and forming the foundation for equitable opportunities.

Breaking Social ●​ Social and occupational barriers should be dismantled to utilize the full
Barriers potential of India's population.

© Sarrthi IAS 9569093856 ​ Economy Foundation Module ​ ​ ​ 25

 Economy

●​ Policies and institutional reforms must remove hindrances and incentivize

private initiatives. Work-from-home and work-from-anywhere models can
help overcome social conventions that restrict mobility and employment
types.

Education ●​ Equalising the quality of education and skills across different regions and
groups is essential.
●​ Hybrid systems should be designed to narrow the quality divide by
providing access to top educators and trainers, leveraging AI to enhance
the quality of education at all levels.

Health ●​ Hybrid systems should be developed to provide access to high-quality health

services, particularly in underserved areas. Expert systems can improve
service quality at every level, benefiting both providers and patients.

Old Age ●​ Information platforms are crucial for closing the informational gap between
Population the old and young. These platforms can provide timely and relevant
information, helping bridge the generational divide in knowledge access.

Level Playing ●​ A level playing field between companies and MSMEs requires simplifying
Field for and reforming the tax system, integrating all applicable taxes, and
Companies automating tax processes to reduce compliance costs.
●​ This can enhance ease of doing business and support MSMEs in accessing
working capital.

Tax System ●​ The tax system should be digitized and integrated to automate calculations,
payments, and refunds, minimizing compliance time and costs.
●​ This system can also support the development of a progressive cash
transfer system integrated with the income tax system, preserving work
incentives while minimizing fiscal costs.

The Global ●​ India's diverse demographic landscape, rooted in cultural and civilizational
Situation and unity, necessitates empowering all groups and providing equal opportunities.
India's Role in ●​ The focus should be on leveraging India's demographic strengths to
Context of enhance its global role, ensuring that personal motivation and hard work are
Demographics complemented by equal opportunities.

© Sarrthi IAS 9569093856 ​ Economy Foundation Module ​ ​ ​ 26

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