DAILY MAINS ANSWER WRITING CHALLENGE
Practice Question 15
Q) Discuss the observations made in the World Economic Forum’s Inclusive Growth and Development Report 2017 and their implications for India.
‘Inclusive Growth and Development Report 2017’ is released by WEF to provide a more complete picture of economic development. Report seeks to help international community to practice inclusive growth and development. It also offers a new policy framework and a set of indicators for this purpose.
Report made following observations:
1. There is fall in long-term growth in the world economy.
2. Investments in world economy have been limited.
3. Many countries are facing unfavorable demographic dividend
4. Inequalities in country are rising.
5. Unemployment is rising due to automation.
6. GDP as measurement of output has limitations. It is unable to explain the distribution of growth.
7. Most countries are missing important opportunities to raise economic growth and reduce inequality at the same time because the growth model and measurement tools that have guided policymakers for decades require significant readjustment.
8. Of the 103 countries, 51% saw their IDI (Inclusive Development Index) scores decline over the past five years.
Implications for India:
1. India’s growth in GDP per capita is among the top 10, strong labor productivity growth and lowering levels of poverty. Yet, India has been ranked 60th among the 79 developing economies. It is much lower than the neighbouring countries. China (15th), Nepal (27th), Bangladesh (36th) and Pakistan (52nd).
2. Educational enrolment rates and the labor force participation rates are low.
3. The informal economy is large, and many workers are in vulnerable employment situations with little room for social mobility.
4. New business creation continues to be held back by corruption, underdeveloped infrastructure, and the large administrative burden involved in starting and running companies.
5. India’s debt-to-GDP ratio is high, that raises some questions about the sustainability of government spending.
6. India needs more progressive tax system to raise capital for expenditures in infrastructure, health care, basic services and education.
Despite growth in GDP per capita, inclusiveness had not improved. This call for relook at social and economic policies in order to orient them to build an egalitarian society.