Note: “Faster, sustainable and more inclusive growth” has become an important buzzword in recent times. It is also the theme for the 12th FYP. Some argue that faster growth that we witnessed was driven by certain sectors of the economy, while the poverty gap only increased. While this does hold some merit, there are alternative opinions by some economists, such as the one presented here:
- Record poverty reduction has occurred simultaneously with record GDP growth. This shows dramatically how fast growth is the best antidote for poverty.
- Fast growth provides a revenue bonanza for anti-poverty programmes.
- More important, it creates new economic opportunities that absorb the reserve army of labour.
- This creates labour shortages, pushing up real wages. This has happened dramatically in recent years.
- There is a widespread illusion that fast growth just happens and then the government should redistribute the bonanza.
- No, 8% growth is rare globally because it cannot be achieved just by the fast growth of a few regions or businesses.
- It can be achieved only when the productivity of a large chunk of the population goes up.
- Inclusion is not something that comes later. Rather, only when the bulk of states and people are prospering will fast growth happen. That’s the big India story.
- Let nobody think that fast growth occurred just in advanced states, and was then redistributed by the government to backward states.
- (2009 to 2012) the National GDP growth averaged 7.7%. The fastest states were Uttarakhand and Bihar (12.5%). Next came Gujarat (10.3%), Madhya Pradesh (9.9%), Goa (9.8%) Maharashtra (9.7%), Haryana (9.6%) and Jharkhand (9.2%).
- High growth rates in pooe states were drawn on the new opportunities and improved infrastructure created by two decades of economic reform.
- Fast growth did not trickle down to the backward states. Rather, accelerated growth in backward states trickled up to create fast national growth.
- Record poverty reduction has occurred simultaneously with record GDP growth. This shows dramatically how fast growth is the best antidote for poverty. .