{"id":249010,"date":"2023-06-21T20:29:06","date_gmt":"2023-06-21T14:59:06","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=249010"},"modified":"2023-06-21T20:29:06","modified_gmt":"2023-06-21T14:59:06","slug":"growth-versus-equity-a-debate-that-india-shouldve-long-settled","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/growth-versus-equity-a-debate-that-india-shouldve-long-settled\/","title":{"rendered":"Growth versus equity: A debate that India should\u2019ve long settled"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article\u00a0\u201cGrowth versus equity: A debate that India should\u2019ve long settled\u201d <\/strong>published in Live Mint <\/strong>on\u00a021st<\/sup> June 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS 3 \u2013 Indian Economy- Growth & Development<\/strong><\/p>\n

Relevance: <\/strong>Impact of higher growth on poverty and on inequality<\/strong><\/p>\n

News<\/strong>: There has always been debate over growth versus equity, means, how growth of nations impact the well-being of the people. This article explains the impact of growth on poverty and on inequality.<\/p>\n

What is the impact of higher growth on poverty?<\/strong><\/h2>\n

It is often argued that growth and poverty are in conflict, i.e., when the growth of a nation increases, it increases poverty.<\/p>\n

However, in a democratic society, it is difficult to argue that poverty would decrease with high GDP. For instance,<\/strong> a higher GDP growth rate, such as 15%, is likely to reduce poverty more significantly than a lower rate, around 10%.<\/p>\n

Moreover, the government’s measures to redistribute income would also face less resistance with higher growth.<\/p>\n

Does higher growth increase inequality?<\/strong><\/h2>\n

The relationship between growth and inequality is the inverse. For instance<\/strong>, a 15% growth rate is likely to be accompanied by greater income inequality compared to a 5% rate.<\/p>\n

This is because capabilities are unevenly distributed in society, and different sectors of the economy grow at different rates.<\/p>\n

For instance,<\/strong> those with the most suitable skills for the faster-growing sectors will experience proportionately higher income growth, while other sectors may find their skills inadequate for the new economic changes.<\/p>\n

This structural adjustment occurs irrespective of the country’s political system. Even in China<\/strong>, income inequality has increased over the past decade.<\/p>\n

The United States has also witnessed<\/strong> the shift of manufacturing production to developing countries, like China and east Asia.<\/p>\n

However, in the US, the market has driven the re-skilling of workers, whereas in developing countries like India, there is a consensus that the state should fund or direct such re-skilling.<\/strong><\/p>\n

Therefore, the issue of inequality is critical for India, and it is often associated with the challenge of poverty reduction.<\/p>\n

What are the challenges associated with India\u2019s growth?<\/strong><\/h2>\n

There has been a significant structural change in the country’s economy after 1991 economic reforms.<\/p>\n

Due to these reforms, certain industries, such as small-scale textile and handloom sectors, faced intense competition from abroad, for which they were unprepared.<\/p>\n

Despite the government support to the textile industries, the dominance of textiles as an export item has declined over time. <\/strong><\/p>\n

Countries like Vietnam, Bangladesh, and Pakistan<\/strong> are now leading the textile export economy in South and Southeast Asia.<\/p>\n

What can be the way ahead for India?<\/strong><\/h2>\n

There is a need for strong government incentives and support for Small Scale Industries (SSIs) and prioritizing re-skilling initiatives<\/strong>.<\/p>\n

Economic growth with government support for re-skilling<\/strong>, rather than picking growth over equity, (or vice versa), is the right political choice.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cGrowth versus equity: A debate that India should\u2019ve long settled\u201d published in Live Mint on\u00a021st June 2023. Syllabus: GS 3 \u2013 Indian Economy- Growth & Development Relevance: Impact of higher growth on poverty and on inequality News: There has always been debate over growth versus equity, means, how… Continue reading Growth versus equity: A debate that India should\u2019ve long settled<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10501],"class_list":["post-249010","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1701601988},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/249010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=249010"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/249010\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=249010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=249010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=249010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}