Home/Indian Economy/Inclusive Growth & Economic Development
Inclusive Growth & Economic Development
Share
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of inclusive growth? (Answer in 150 words) [UPSC2024]
Model Answer Introduction Article 41 of the Indian Constitution mandates the government to ensure social welfare, which has been a guiding principle in shaping public expenditure on social services. Following the economic reforms of 1991, India witnessed a significant transformation in public spendiRead more
Model Answer
Introduction
Article 41 of the Indian Constitution mandates the government to ensure social welfare, which has been a guiding principle in shaping public expenditure on social services. Following the economic reforms of 1991, India witnessed a significant transformation in public spending patterns aimed at achieving inclusive growth.
Pattern and Trend of Public Expenditure
Alignment with Inclusive Growth
Challenges to Inclusive Growth
Despite these advancements, challenges persist:
Conclusion
while public expenditure on social services in India has evolved significantly post-reforms, aligning with the goals of inclusive growth, critical gaps remain. Enhanced governance and equitable resource allocation are essential to bridge these divides and ensure sustainable development for all.
See lessHow can India's traditional knowledge provide solutions for promoting sustainable agriculture and environmental conservation? Illustrate with examples
Model Answer India's agriculture sector, contributing 14% to the country's GHG emissions, faces significant challenges. However, traditional knowledge offers sustainable solutions for promoting environmental conservation and agricultural resilience. These age-old practices, rooted in local ecosystemRead more
Model Answer
India’s agriculture sector, contributing 14% to the country’s GHG emissions, faces significant challenges. However, traditional knowledge offers sustainable solutions for promoting environmental conservation and agricultural resilience. These age-old practices, rooted in local ecosystems, can contribute to more sustainable farming practices.
1. Effective Resource Management
Traditional knowledge emphasizes efficient resource management, such as the Kaipad system in Kerala. This unique fish-farming technique uses tidal water for irrigation while integrating rice and fish farming, promoting a balanced ecosystem. This system ensures optimal use of water resources while maintaining agricultural productivity.
2. Rainwater Harvesting
In the face of depleting groundwater resources, traditional rainwater harvesting systems offer a sustainable solution. One notable example is the Zabo System of Nagaland, where a protected forest area on top of a hill collects rainwater, which is then stored in tanks and used for irrigation in the paddy fields below. This system helps conserve water and supports agricultural sustainability.
3. Food Security
Traditional agricultural practices help preserve local ecosystems and enhance food security. The Bari system of Assam, a home garden method, utilizes kitchen waste and fallen tree leaves as manure to grow local crops like jackfruit, banana, and mango. This promotes biodiversity and supports local food systems.
4. Organic Manure
In regions like Kerala, traditional knowledge has fostered the use of organic manure, where farmers mix cow dung, used fuel wood ash, and coconut fiber waste to create chemical-free fertilizers. This practice promotes soil health and reduces reliance on synthetic chemicals.
5. Crop Diversification and Pest Management
The Baranaja system, practiced in the Himalayas, involves growing diverse crops without pesticides, promoting biodiversity and protecting crops from extreme climatic events. Additionally, natural pest management methods, such as using neem-based pesticides, reduce the dependence on harmful chemicals and enhance sustainability.
Conclusion
Reviving and integrating India’s traditional knowledge systems into modern agricultural practices can play a crucial role in enhancing sustainability, protecting the environment, and securing food supplies in the face of climate change. These methods offer valuable lessons for building a more resilient agricultural system.
See lessDiscuss the role of Unified Payment Interface (UPI) in promoting financial inclusion in India. ( 200 Words)
Model Answer Introduction Unified Payment Interface (UPI), launched in 2016 by the National Payments Corporation of India (NPCI), has become a game-changer in promoting financial inclusion in India. By leveraging mobile technology, UPI has revolutionized financial services, making them more accessibRead more
Model Answer
Introduction
Unified Payment Interface (UPI), launched in 2016 by the National Payments Corporation of India (NPCI), has become a game-changer in promoting financial inclusion in India. By leveraging mobile technology, UPI has revolutionized financial services, making them more accessible, efficient, and inclusive.
Widespread Accessibility
UPI has significantly increased the accessibility of financial services across India. The number of banks participating in the UPI network has grown from 21 in April 2016 to over 550 in 2023, ensuring that millions of individuals, including those in rural and remote areas, can access financial services through their smartphones. This widespread accessibility has empowered previously underserved populations to engage in formal financial systems.
Empowering MSMEs
Micro, Small, and Medium Enterprises (MSMEs) have greatly benefited from UPI. It has simplified the acceptance of digital payments, allowing MSMEs to seamlessly integrate into the formal economy. According to a study, 90% of retailers make payments to suppliers digitally, with 70% of MSMEs reporting that half of these payments are made via UPI.
Empowering the Unbanked and Underbanked
UPI’s mobile-based model has empowered the unbanked and underbanked populations. Linking bank accounts to UPI IDs enables individuals in remote areas, who lack traditional banking infrastructure, to access financial services. This feature has been especially critical in increasing financial inclusion in rural India.
Reducing Transaction Costs and Increasing Efficiency
UPI has drastically reduced the cost and increased the efficiency of transactions. As per the Reserve Bank of India (RBI), UPI’s share in India’s digital payments ecosystem reached nearly 80% in 2023, highlighting its growing role in streamlining financial transactions for lower-income individuals and small businesses.
Innovative Tools
UPI’s innovative features, such as UPI 123PAY, which allows users of feature phones (without internet access) to make digital payments, have bridged significant demographic gaps. These innovations have made financial services accessible to a broader population.
Promoting Savings and Financial Literacy
By simplifying access to banking, UPI has fostered financial discipline and increased financial literacy. Individuals previously excluded from the formal banking system are now more aware of savings and financial management.
In conclusion, UPI has paved the way for a more inclusive and financially empowered India, enabling millions to access and benefit from the formal financial ecosystem.
See lessAnalyze the connection between health and poverty. How can inclusive healthcare contribute to achieving inclusive growth in India? (200 words)
Model Answer Health and poverty are intricately linked in a cyclical manner, where one exacerbates the other. Poor health often leads to reduced productivity, preventing individuals from accessing better economic opportunities and income, thus perpetuating poverty. In India, where public spending onRead more
Model Answer
Health and poverty are intricately linked in a cyclical manner, where one exacerbates the other. Poor health often leads to reduced productivity, preventing individuals from accessing better economic opportunities and income, thus perpetuating poverty. In India, where public spending on healthcare remains low (2.1% of GDP), many families are forced to bear high out-of-pocket expenses. According to the WHO, more than 55 million people are pushed into poverty annually due to healthcare costs. Additionally, poverty restricts access to essential resources like clean water, sanitation, and nutritious food, leading to poor health outcomes. This further hinders economic mobility, especially among vulnerable populations.
How Inclusive Healthcare Promotes Inclusive Growth
In line with the United Nations’ Sustainable Development Goal (SDG) 3, India is increasing its healthcare expenditure, with schemes like Ayushman Bharat to ensure inclusive healthcare for all.
See lessWhat are the major challenges in tackling wealth and income inequality in India? (200 words)
Model Answer India has witnessed impressive economic growth in recent decades, but the benefits have been disproportionately distributed, leading to significant wealth and income inequality. As per the Oxfam 2023 report, 5% of Indians control more than 60% of the nation's wealth, while the bottom 50Read more
Model Answer
India has witnessed impressive economic growth in recent decades, but the benefits have been disproportionately distributed, leading to significant wealth and income inequality. As per the Oxfam 2023 report, 5% of Indians control more than 60% of the nation’s wealth, while the bottom 50% own just 3%. This stark disparity is driven by several key challenges:
Addressing these challenges requprehensive approach: increasing government investment in health and education, improving tax policies, encouraging female workforce participation, and expanding formal sector employment.
See lessHow significantly has foreign direct investment (FDI) in India contributed to the country's economic growth and development? (200 words)
Model Answer Foreign Direct Investment (FDI) has played a crucial role in India's economic growth and development, particularly since the liberalization reforms of the early 1990s. Here’s an overview of its significant contributions: Increase in FDI Inflows FDI inflows into India have surged dramatiRead more
Model Answer
Foreign Direct Investment (FDI) has played a crucial role in India’s economic growth and development, particularly since the liberalization reforms of the early 1990s. Here’s an overview of its significant contributions:
Increase in FDI Inflows
FDI inflows into India have surged dramatically, rising from $4.03 billion in 2000-01 to $71.3 billion in 2022-23. This increase reflects the growing confidence of foreign investors in the Indian market and its potential for growth.
Facilitating Domestic Investment
FDI has complemented domestic investments across various sectors. A notable example is Walmart’s acquisition of a 77% stake in Flipkart in 2018, which injected substantial foreign capital into India’s retail and e-commerce sectors .
Technological Advancement
Foreign investments have facilitated the transfer of advanced technologies to Indian industries. For instance, Boeing’s partnership with Tata Advanced Systems Limited to produce aerospace structures exemplifies how FDI can enhance technological capabilities in the country .
Positive Impact on the Services Sector
The services sector, particularly IT-BPM and financial services, has seen significant foreign investment. Companies like Accenture and Goldman Sachs are expanding their operations in India, contributing to the sector’s growth .
Employment Generation
Multinational corporations have a substantial impact on job creation. Amazon, for example, has announced plans to create 1 million jobs in India by 2025, highlighting the employment potential of FDI .
Challenges and Shortcomings
Despite these contributions, there are notable challenges. FDI inflows fell by 16% to $71.3 billion in 2022-23 from $84.8 billion in the previous year, indicating a potential decline in investor confidence . Additionally, there is a concerning trend of negative reinvested earnings and capital outflows, which could undermine the benefits of FDI . Furthermore, FDI is concentrated in a few states, with Karnataka, Maharashtra, and Delhi attracting 78% of total inflows in 2021-22, leading to regional imbalances. The manufacturing sector also remains underfunded, receiving only 34.6% of total FDI from 2000 to 2019, despite initiatives like “Make in India” .
In conclusion, while FDI has significantly transformed India’s economic landscape, addressing these challenges is essential for maximizing its long-term benefits.
See lessCredit Rating
Six Sigma Effectiveness: This means a dramatic reduc¬tion of defects within a process; that is what the essence of Six Sigma is. It also helps to increase the quality of products which in turn will improve customer satisfaction and reduce cost. Higher efficiency and productivity: Through Six Sigma,Read more
Six Sigma Effectiveness:
This means a dramatic reduc¬tion of defects within a process; that is what the essence of Six Sigma is. It also helps to increase the quality of products which in turn will improve customer satisfaction and reduce cost.
Higher efficiency and productivity: Through Six Sigma, the organisation can streamline its processes and work more efficiently, with no extraneous activity.
-Financial performance: It may indicate better financial returns like revenues and profitability may be achieved with decreased defects, increased efficiency and with an avenue of high customer satisfaction.
-Boosted employee morale and engagement: Six Sigma empowers the employee since it teaches them methods to solve problems hence, it makes them more engaged employees.
However, it is crucial to note that success in Six Sigma depends on several factors:
-Strong leadership commitment: There is no doubt that executive sponsorship is a critical aspect of Six Sigma programs.
-Appropriate training and certification: People in an organization must be trained and accredited especially in the area of Six Sigma.
Data-driven approach: Six Sigma is big on statistics as it involves working towards finding out the root causes of issues.
Continuous improvement: It is also important for one to understand that Six Sigma is not a project rather it is a chronic process. Six Sigma Certification Agencies:
This means that no institution will issue organisations a single ‘official’ rating for ‘Six Sigma’. Almost all credible organizations are awarding Six Sigma certifications for individual individuals and evaluating the deployment of Six Sigma principles in an organization. A few of them include:
ASQ (American Society for Quality) This is the most recognized institution of all. Six Sigma certification offered by ASQ varies in a hierarchy system that include Yellow Belt, Brown Belt, Green Belt, Black Belt and more.
The third best international company offering Six Sigma certifications.
-IIE (Institute of Industrial Engineers): Home to Six Sigma certification for those who work in different fields.
. While there is no institutional certification called the “Six Sigma rating,” per se.
See lessDo you think India's present economic condition( after 1950) can be attributed to the shape of the Kuznet's inverted U-Hypothesis?
Kuznet’s Inverted U Hypothesis Kuznet’s hypothesis in the effect of economy development, with initial prejudice income disparity rises. Reasons can be described in terms of: There is a clear positive relationship between industrialization and proportionate increase in wealth at initial stages whereRead more
Kuznet’s Inverted U Hypothesis
Kuznet’s hypothesis in the effect of economy development, with initial prejudice income disparity rises. Reasons can be described in terms of: There is a clear positive relationship between industrialization and proportionate increase in wealth at initial stages where most wealth is concentrated at the few; while the majority of population including workers largely in traditional sectors receive stagnant wages- incomes.
-Technological Change: Technological advancement and development bring about the creation of new forms of wealth but who benefits most or first may be those with retirement financial muscle and skills.
However, in the later stages of economic maturity and development, the economy:
-Technological progress: Brings about greater efficiency, and hence improved wages for a higher percentage of citizens.
-Social safety nets: The progressive taxation, social programs and welfare measures offered by the government eliminate inequalities.
-Education and skill development: Investing in keeping education and skills enhances a better skilled human resource, and income equality is also promoted.
India’s Economic Context
-Post-Independence Growth: India has seen a very dynamic economic growth ever since getting its independence at the beginning of 1947.
-Initial Inequality: In the early days of planned development there was slight increase in inequality as those who benefited from industrialization were specific sectors and regions.
-Recent Trends: Top management pay has been ascending in India during the last several decades. This is mainly due to factors such the globalization, liberalization and advancement in technology which e has enhanced the growth of some sectors and geographical locations than others.
Nature of economic activities on the Kuznet’s Curve
Based on the available economic status of India, it is at the rising stage of the Kuznet’s curve.
-Increasing Inequality: Growth has been sizeable but not necessarily inclusive. Income inequality has risen and the number of people falling into poverty and inequality is quite significant.
Going to enter the decline: India would likely be among the first to enter the decline part of the curve. The policies of inclusive growth, social safety nets, and skill development will bring that about.
In general:
In its economic performance, India has truly shown quite outstanding growth but remains yet to be done as regards rising inequality. This calls for focus on policies which would bring forth equitable wealth distribution, enhance strength in the social safety net, and also the development of human capital that leads to going down the curve.
See lessWhat are the effects of persistent economic inequality in India, and what challenges exist in tackling this issue? (200 words)
Model Answer Effects of Persistent Economic Inequality in India India's persistent economic inequality has far-reaching consequences that affect various aspects of society and the economy: Economic Risks: High levels of inequality can undermine economic growth and macroeconomic stability. When lowerRead more
Model Answer
Effects of Persistent Economic Inequality in India
India’s persistent economic inequality has far-reaching consequences that affect various aspects of society and the economy:
Challenges in Addressing Economic Inequality
Several challenges complicate efforts to reduce economic inequality in India:
To address these challenges, measures such as taxing the wealth of the richest 1%, easing the tax burden on marginalized groups, improving access to public services, and strengthening labor rights are essential for promoting equity and social justice in India.
See lessWhat are the reasons for the ongoing persistence of poverty in India, despite the various measures implemented for poverty eradication in recent years? (200 words)
Model Answer Reasons for Persistent Poverty in India Despite significant efforts to eradicate poverty, India continues to grapple with persistent poverty, affecting approximately 228.9 million people, making it the country with the largest number of poor individuals globally . Several factors contriRead more
Model Answer
Reasons for Persistent Poverty in India
Despite significant efforts to eradicate poverty, India continues to grapple with persistent poverty, affecting approximately 228.9 million people, making it the country with the largest number of poor individuals globally . Several factors contribute to this ongoing issue:
To effectively tackle persistent poverty, India needs to shift its spending focus from broad subsidies to targeted support for vulnerable populations and increase public investment in long-term development initiatives .
See less