Achieving inclusive growth continues to be the biggest challenge for our country, as it concerns integrating 600 million people living in rural India and several million living in urban slums, into the mainstream economy, in a fair manner

While there are many reasons to celebrate 64 years of India's independence, there are good reasons to introspect as well. The primary cause for concern is that the dichotomy has rendered our nation into two unequal worlds. The miniscule part is the India 'shining', with its small number of people who have access to the majority of resources, and the larger part of Bharat, with its teeming millions struggling for even one square meal a day.

Many people take pride in the fact that the Indian economy has been growing at rates between 7%-9 % in the past few years. In fact, some people even argue that a testimony to India's progress is the improvement of the country's Human Development Index (HDI), from 0.406 in 1975 to 0.571 in 1999. They also cite legislations enacted in recent years to show that India is on the highway to progress; like the 73rd and 74th constitutional amendments passed in 1992 that are said to have strengthened political participation at the grassroots level and brought more than a million women into public life.

These trends, however positive, are accompanied by a paradox-the ever-looming spectre of the 'other' India of urban poverty and rural inequities that refuses to go away. A shocking 30%-35% of India's total population still lives below the poverty line and as the graph (Various estimates of the number of people living in poverty) suggests, more and more people are becoming vulnerable and poorer, with each passing day.



Poverty, accompanied by low health and nutrition levels, high infant mortality and illiteracy, is now almost uniform, in terms of the proportion of population in rural and urban areas. Using the Indian definition based on income needed to acquire food, to provide the minimum required calories (2,100 for rural and 1,800 for urban adults), roughly 260 million people or 26% of the population falls below the poverty line.

Using another definition of poverty—those living on less than $1 per day—the number of poor would be much larger, say around 400 million, or about 36% of the population. This becomes even more serious when one considers the report of the Arjun Sengupta Commission which estimates that about 903 million are vulnerable to becoming poor. Sixty four years after independence, these are disturbing statistics and in many ways a serious indictment of the effectiveness of our policies and the efforts so far.

And within these poor are the poorest, who live on an income of less than $0.50 per day. Most of this population lives in Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh, collectively called the BIMARU states. With the carving out of the states of Chhattisgarh, Jharkhand and Uttaranchal from Madhya Pradesh, Bihar and Uttar Pradesh respectively, these are more BIMARU states.

There are several variations within these states too. For instance, very high poverty rates of up to 60% exist in southern Bihar, southern Orissa, Madhya Pradesh and southern Uttar Pradesh. These regions are either mainly tribal or rocky and dry, yet densely populated because of their agro-climatic features. Low poverty reduction in the poorer states is because of their lower initial levels of rural and human development and large disparities between rural and urban areas.

Therefore, while inclusive growth, as a paradigm, has gained significant acceptance in India among policymakers and some others, and it is being touted as the mantra for success in modern India, there are several good reasonsⁱⁱ  why this paradigm has not achieved serious success on the ground, so far.

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