The measurement of growth using the concept of GDP is one of the key factors that contribute to reduce poverty and uplift the living standard of the people. Discuss the rationale of Inclusive Growth in this context.

Undoubtedly, as evidence and experience prove, economic growth is one of the key factors that contribute to reduce poverty and uplift the living standard of the people in developing countries. However, growth by itself is not sufficient to achieve these goals because the trickledown effect does not bring benefits to the poor automatically, as expected. Hence, both the pace and pattern of growth need to be just right to achieve sustainable poverty reduction over the long term. With this understanding the policymakers have turned their attention towards the notion of pro-poor growth. Pro-poor growth concentrates only on the absolute poverty but not on inequality and relative poverty. Lately, the idea of pro-poor growth has been superseded by the notion of inclusive growth. In fact, it could be seen as an extension of pro-poor growth. Inclusive growth emphasizes not only the pace of growth but its pattern too; i.e. it takes into account the contribution of not only the poor men and women but also of the non-poor. Hence, inclusive growth encompasses both poverty and income inequality. Further, policies designed to promote inclusive growth will contribute to improve the non-income aspects of the poor people’s lives.

Topics: GS-III: Economic Growth Development