Delayed- transition from exclusive to inclusive growth ( March 2018 )

The excessive obsession with the GDP growth rate has further intensified the cumulative inequalities in India. The World Economic Forum (WEF) has said that the excessive reliance by economists and policy-makers on GDP as the primary metric of national economic performance is part of the problem. The GDP measures current production of goods and services rather than the extent to which it contributes to broad socio-economic progress as manifested in median household income, employment opportunity, economic security and quality of life. The social security has reached to its lowest ebb. The participation of women in jobs is not very encouraging. Moreover, the stagnation of real wages is a clear sign, among others, of the lopsidedness of economic growth in India. This has hampered the social spending. The social spending in India is quite low by international standards as a proportion of GDP. In achieving the herculean task of inclusive growth, everyone must contribute at one's optimum level. In this regard, the corporate India needs new ways to make sure that small but important innovations don't get lost. The common people must work hard and support the government. The middle class should be more enterprising. The government should encourage financial literacy by bridging the digital divide. The investment should be made to push forward the asset creation rather than conspicuous consumption. The social policies should be made pro-active and people-driven. The saga of Indian economy lies in confusion starting from mixed economy to half-hearted structural reforms. This has resulted in jobless growth. In fact, job growth averaged only approximately 2 per cent a year in the formal sector in the last decade. In the coming decades, some 12-15 million Indians will enter the labour force each year, and if the current job growth trends continue to persist, then less 50 per cent would get a job in the formal sector. And rest will have to rely on hard-pressed struggling informal sector which still employs more than 80 per cent population of India. The growing informal sector employment is the greatest testimonial of the failure of the system in ensuring inclusive growth. The informal sector is jerky, insecure, exploitative, denies the workforce from quality of life and involved in unpredictable low productivity activities. This affects the existing levels of demand of the market. In the WEF report, India was ranked at the 62nd place among emerging economies on an Inclusive Development Index, much below China's 26th position and Pakistan's 47th. Therefore, India has only two options: either go for the expansion of formal sector or respect the informal sector and try to support it by regulation and resources. And both options are not an easy one. And the widening gap between India and Bharat has to be bridged without any delay in a systematic manner with specific target-oriented roadmap.