Why GDP Growth is Important for the Objective of Inclusion?

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Why GDP Growth is Important for the Objective of Inclusion

Why GDP Growth is Important for the Objective of Inclusion? If this was your question then we gonna solve this, Sometimes planners are criticized for focusing too much on GDP growth, while the real objective should be to improve the quality of life of people, both economically and not economically.

The Twelfth Five Year Plan fully recognizes that the objective of development is a generalized improvement of the economic and social conditions of the Indians. However, the rapid growth of GDP is an essential condition to achieve this goal.

There are two reasons why GDP growth is important for the objective of inclusion


  • First reason

The rapid growth of GDP leads to a greater expansion of total income and production which, if the growth process is sufficiently inclusive, directly raises the standard of living of a large part of the population.

We should not focus solely on GDP growth, but on a process of growth that is as inclusive as possible.

For example, the rapid growth that implies a faster growth of agriculture, and particularly in the rain fed areas where the majority of the poor live, will be much more inclusive. Similarly, rapid growth based on faster growth for the manufacturing sector as a whole, including MSMEs, will generate greater employment and income opportunities and, therefore, will be more inclusive than growth driven largely by the extraction industries.




  • Second Reason

Why rapid growth is important for inclusion is that it generates higher income, which helps finance critical inclusion programs.

There are many programs of this type that directly benefit poor and excluded groups, or increase their capacity to access employment opportunities and income generated by the growth process.

For Example, the programs like National Rural Employment Guarantee Act in Mahatma Gandhi (MGNREGA), Sarva Siksha Abhiyan (SSA), mid day meals, Integrated Child Development Services (ICDS), Pradhan Mantri Gram Sadak Yojana (PMGSY), National Rural Health Mission (NRHM), etc.

This is also relevant to the sustainability objective, since programs to make development more sustainable also entail additional costs.

So, these are the main two reasons why GDP growth is important for the objective of inclusion.