Inclusiveness in India

As the second largest consumer market in the world, the Indian economy has been enjoying high economic growth in recent years. Consequently, its role in the world, both economically and politically, has been expanding. It is, however, commonly pointed out that social and economic disparities across, for example, geographical, socio-economic, ethnic and gender lines have widened during this period. Inclusive growth, broadly defined as rapid growth benefiting every section of society, has been the main strategy pursued by the present Union Government of India. Unfortunately, the existing literature on inclusive growth is overwhelmingly concentrated on the trend and extent of inequality, particularly the economic aspects of regional inequality. This volume goes far beyond the conventional analysis of economic inequality and intends to critically examine inclusive growth in a wide range of social, economic and geographical areas.

The Indian economy has been growing in recent years. Though slow growth was once referred to as the ‘Hindu rate of growth’, now India has been moving forward at faster speeds. For the five years from 2002/3 to 2007/8, the real per capita net national product grew annually at around 7 per cent on average. Although growth slowed in 2008/9 due to the global financial crisis triggered by the crash of subprime loans, the economy showed a steady increase and demonstrated its robustness. India’s economic growth rate may not be comparable to China’s, but the ‘big sleeping elephant’ finally awoke and has started trotting. Because of its rapid and relatively stable economic expansion and its population exceeding 1 billion, India has been regarded as one of the promising emerging countries in the global era. Against the background of such high economic growth, however, lies a growing concern over deteriorating income inequality in various spheres: regional disparity — that is, interstate disparity, rural-urban disparity, social class disparity (inequality between Hindu caste and outcaste) and so on. While many studies highlight the widening disparity in India and its negative implication in recent years,¹ inequality issues, in fact, are not new to India. Since her independence or even in the pre-Independence era, inequality has topped the agendas of India’s policy-makers. The dilemma facing India now is an old and traditional one, the dilemma between growth and distribution. India’s economic policy has vacillated in the balance between them. Now, in the present context, a further problem is that inequality has been rising despite several attempts to redress it.

It is well known that there is an overwhelming tendency for the rural poor in India to be landless (e.g., Walker and Ryan 1990). While landlessness is one outcome of poverty, it is also viewed as a reason for persistent poverty. Land ownership may present rural landless households with a way out of poverty, but the majority of families in need are not in a position to take such a route. This chapter sheds some light on whether or not this path out of poverty is still important, and to what extent it is an option for the rural poor in the context of India’s recent economic growth.

Health is considered to be paramount to wellbeing. Good health directly enhances welfare, but also increases the chance of being wealthy by raising people’s innate productivity. With a booming economy, people in good health should benefit from increased opportunities. It is therefore essential in reducing socio-economic inequality to provide quality health care to the underprivileged population.

It is widely acknowledged that there are disparities in education in India in terms of access to schools, the quality of schooling, and educational attainment, across spatial, social, economic, gender and ethnic lines, as well as in other respects. The lack or inadequacy of education is a serious issue, not only because education, particularly elementary education, is constitutionally and legally guaranteed as a fundamental right of children, but also because it is perceived to have a pivotal role in poverty alleviation. Much of the literature suggests that education has not only intrinsic value but also instrumental value in that it enhances the quality of life, helps people to earn more, improves their health and raises a person’s awareness of their rights, etc. for themselves and the next generations. Disparities in the quality and quantity of education a child can receive, therefore, are likely to affect a wide range of opportunities in the course of one’s life and, worse still, such disparities reinforce the socio-economic status quo for future generations.

This chapter is an attempt to examine the relation between the provision of semi-public goods and the status of religious minorities in India. Among these religious minorities,¹ the focus is on the Muslim communities since the socio-economic status of Muslims, which is thought to have gradually deteriorated since independence, is a very important issue in India today.

In India, which has begun to experience high economic growth, it has become critical for the government and for society at large to make this growth more inclusive by ensuring decent employment and better economic and social security. The Indian National Congress, at the head of the United Progressive Alliance (UPA) government that came to power in 2004 with the promise of benefiting aam aadmi (common people), achieved a second and even larger victory in the general election of 2009. The post-election assessments report that the victory owed much to the government’s employment creation measures, namely the National Rural Employment Guarantee Act (NREGA) of 2005,¹ which legally ensures 100 days of manual work a year to any willing household at the statutory minimum wage. Since NREGA covers only rural areas, there has been a call for measures to tackle the problems of urban employment, including expanding NREGA to the urban areas.

Bihar, a Hindi-belt state with a population of 104 million, has always remained a complete puzzle to observers of Indian affairs. This is because, compared to the other regional states of India, it seems to have followed a quite different path of economic and political development over the past few decades.

During the last six decades since independence, the long-term growth rate of the Indian economy has been at least moderate at around 5 per cent. Even more comforting is the fact that, during the last two decades, the economy has escaped from the ‘Hindu’ rate of growth of barely 3–4 per cent to reach a decent growth rate of above 7 per cent. The last two decades have also seen an appreciable reduction in demographic growth rate, leading to a speedier growth of per capita income. But this positive description of the aggregate Indian economy is somewhat misleading, as the equity outcomes of this growth process have been very skewed. What possibly has contributed most to such (in)equitable outcomes is the sectoral composition of the overall growth; during the entire post-independence period, the agricultural sector in India has grown at less than half of the growth rate of the non-agricultural sector. This sectoral disparity would not have mattered if the growth was accompanied by a substantial shift of population from the low-productivity agricultural sector to the rapidly growing industrial sector. But that was not the case; between 1951 and 2001, the share of rural population has decreased by just 16 percentage points. Consequently, the source of livelihood of close to two-thirds of the country’s population even now continues to be the low-productivity agricultural sector.