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Inclusive Growth in India - Learning from Best Practices of Selected Countries A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Aggarwal, Suresh Chand; Satija, Divya; Khan, Shuheb Working Paper Inclusive growth in India - learning from best practices of selected countries Working Paper, No. 375 Provided in Cooperation with: Indian Council for Research on International Economic Relations (ICRIER) Suggested Citation: Aggarwal, Suresh Chand; Satija, Divya; Khan, Shuheb (2019) : Inclusive growth in India - learning from best practices of selected countries, Working Paper, No. 375, Indian Council for Research on International Economic Relations (ICRIER), New Delhi This Version is available at: http://hdl.handle.net/10419/203709 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Working Paper 375 Inclusive Growth in India – Learning from Best Practices of Selected Countries Suresh Chand Aggarwal Divya Satija Shuheb Khan May 2019 INDIAN COUNCIL FOR RESEARCH ON INTERNATIONAL0 ECONOMIC RELATIONS Table of Contents Abstract ...................................................................................................................................... i 1. Introduction .......................................................................................................................... 1 2. Definition of Inclusive Growth ........................................................................................... 2 2.1 Need for Inclusive Growth ............................................................................................... 3 2.2. Challenges to Inclusive Growth ...................................................................................... 4 3. Inclusive Growth and Fiscal Policy Implications .............................................................. 5 3.1 Need for Specific Policies for Inclusive Growth ............................................................. 6 4. Methodology ......................................................................................................................... 7 5. Status and Pattern of Inclusive Growth............................................................................. 8 5.1. Status and Pattern of Inclusiveness across Selected Countries – Key Findings ............. 9 6. Inclusive Growth - Opportunities and Challenges for India ......................................... 17 6.1. Public Expenditure on Health ....................................................................................... 19 6.2. Fiscal Policy and Health ................................................................................................ 22 6.3. Fiscal Policy and Education .......................................................................................... 22 6.4. Fiscal Policy and Social Security .................................................................................. 24 6.5. Successful Government Interventions to Improve Inclusiveness ................................. 25 7. Conclusion and Policy Recommendations ....................................................................... 26 7.1. Recommendations ......................................................................................................... 26 7.1.1. Inclusive Growth Model Representing Issues Affecting Developing Countries .. 26 7.1.2. Inclusive Public Finance and Fiscal Policy for Inclusive Growth ...................... 27 7.1.3. Learning from Best Practices .............................................................................. 28 7.2. Conclusion ..................................................................................................................... 31 Bibliography ........................................................................................................................... 32 Appendices .............................................................................................................................. 36 List of Tables Table 1: Inclusiveness Score and Rank for Selected Countries and Overall 5-Year Trend IDI ................................................................................................................................. 11 Table 2: Expenditure on Health across Selected Countries (2014) ........................................ 20 Table 3: Availability of Health Care Service Staff across Selected Countries ....................... 21 Table 4: Public Expenditure on Education across Selected Countries (2015) ........................ 23 Table 5: Pension Coverage across Selected Countries ........................................................... 24 Table 6: Government Schemes for Inclusive Growth in Selected Countries ......................... 25 Table 7: Recommendations for Policies to Achieving Inclusive Growth ............................... 29 List of Figures Figure 1: Status of Inclusiveness across Selected Countries .................................................. 10 Figure 2: Inclusive Growth and Development Framework for India ..................................... 14 Figure 3: Key Contributors and Pillars towards achieving Inclusive Growth ........................ 16 Abstract Globally, there is a clamour for creating a more inclusive world and India is also a frontrunner. Government of India is fully committed to its resolve towards achieving inclusive growth. To achieve this goal, efforts are being made to harmonise the national development priorities with international efforts and a number of policies, strategies, programmes / schemes and actions have been implemented at the national level. In this context, this paper1 analysis India's current position in achieving inclusive growth and sustainable development vis-a-vis 17 selected developed and developing countries including the Turkey, South Africa, Mexico, Brazil, China, Korea, Indonesia, United States, United Kingdom, Australia, France, Canada, Indonesia, Argentina, Russia, Italy, Germany and Japan. The paper is based on an in-depth analysis of secondary information. A comparative analysis of India’s inclusive growth position is done with that of the selected countries through a comparison of scores and ranking of these countries vis-a-vis India's position, across key policy and outcome indicators of inclusive growth. In addition, the paper presents specific policies that have a positive impact on both growth and inequality, and that can be the focus of policy action to achieve inclusive growth across different sectors in India. Based on this analysis, best practices that India can adopt have been identified. _________ Key words: Inclusive Growth, Sustainable Development, Development, Fiscal Policy, Equity JEL classification: O15, O19, O23, O38, O40, O57, P46, Q01 Authors’ email: [email protected], [email protected], [email protected] _____ Disclaimer: Opinions and recommendations in the paper are exclusively of the author(s) and not of any other individual or institution including ICRIER. This paper has been prepared in good faith on the basis of information available at the date of publication. All interactions and transactions with industry sponsors and their representatives have been transparent and conducted in an open, honest and independent manner as enshrined in ICRIER Memorandum of Association. ICRIER does not accept any corporate funding that comes with a mandated research area which is not in line with ICRIER’s research agenda. The corporate funding of an ICRIER activity does not, in any way, imply ICRIER’s endorsement of the views of the sponsoring organisation or its products or policies. ICRIER does not conduct research that is focused on any specific product or service provided by the corporate sponsor. 1 The paper is based on the research undertaken by the authors at ICRIER during 2018. i Inclusive Growth in India – Learning from Best Practices of Selected Countries Suresh Chand Aggarwal, Divya Satija and Shuheb Khan 1. Introduction Globally, there is a clamour for creating a more inclusive world. Discontentment from existing growth outcomes especially huge inequalities was evident in many protests starting with the ‘Occupy Wall Street Protests’ in 2011, which later on spread to many other countries. The rise of protectionism and anti-globalisation leading to Brexit and similar right-wing sentiments in few other countries is perhaps the expression of dissatisfaction towards existing growth strategies being adopted across different countries. This is because some of these growth strategies have resulted in high
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