A Theoretical Model for Inclusive Economic Growth in Indian Context

Abstract

The failure of Washington Consensus in the early 1990s forced International Monetary Fund (IMF) and World Bank to address the problems of inequality and poverty through Pro-Poor Growth (PPG). This shift in the global policy debate is evident from the international commitment to the Millennium Development Goals (UN, 2000). The paradigm shift to inclusive growth is evident from the Approach Papers of 11th Five Year Plan of Government of India (2007-12) which focused on faster and more inclusive growth and 12the Five Year Plan(2012-17) which focused on faster, sustainable and more inclusive growth. Inclusive growth is broad based high growth in which the poor not only benefits there from but also participate in the growth process. It not only creates new economic opportunities but also ensures the equal access to them by all, particularly the poor the maximum possible extent. This paper explores the shift in development economics in the last two decades from Pro Poor Growth (PPG) to Inclusive Growth (IG) with special reference to Indian economy. Finally this paper also offers a theoretical framework for inclusive growth model which can support future research in measurement of inclusive growth for diagnosis of economic progress of a country.