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India Emering
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The major challenge for India’s development is inclusive growth. Growth
has reduced poverty and improved the human condition in India. But
economic gains of the middle and richer classes have been greater than
those that went to the poorer sections of society. This is evident from the
fact that reforms in areas such as telecommunications, banks, stock
markets, airlines, trade and industrial policy have not been matched by
agricultural and human development. India’s industrialisation continues to
be capital and knowledge intensive at a time when over 250 million people
survive on less than a dollar a day. If India grows in this way, it will take a
long time to eradicate poverty, illiteracy and malnutrition. Moreover, slow
progress in human development in areas such as education and health will
make it tougher for India to grow in the long run. Increased inequality in
the initial phases of growth has been noted in both theoretical and
empirical economic literature. In this sense, India’s experience is no
different from those of other countries. The big challenge for India is that
being a democratic state, tolerance for inequality and poverty is rapidly
diminishing as is shown by the increase in crime, naxalism and other
socioeconomic problems. Nevertheless, it is instructive to briefly review
economic literature before analysing India’s growth experience