Mains Practice Questions

Introduction:

India currently stands as a global bright spot, emerging as the world’s 5th largest economy with robust growth rates. However, this macroeconomic success often masks a "K-shaped" recovery, where structural inequalities prevent the benefits of wealth creation from trickling down to the bottom of the pyramid.

Body:

Key Barriers to Inclusive Development

• Income Inequality: Despite growth, income distribution remains skewed. The top 10% of earners capture about 58% of national income, while the bottom 50% receive only around 15%, highlighting deep economic disparities in who benefits from growth.
• Persistent Caste And Social Hierarchies: Caste-based discrimination continues to restrict access to education, healthcare, and quality employment for SCs and STs, reinforcing inter-generational deprivation despite constitutional safeguards. Social exclusion weakens the ability of growth to translate into upward mobility.
  • NFHS-5 (2019–21) shows stunning among tribal children at 40.9% indicating persistent nutrition and health inequality.
• Uneven Regional Development: Post-reform growth has been concentrated in a few coastal and industrialised states, while eastern and central regions remain trapped in low productivity and poor infrastructure. This spatial imbalance fuels distress migration and urban congestion.
  • For instance, Per capita NSDP of Bihar is much less than that of Tamil Nadu, reflecting deep regional income disparities.
• Informalisation And Jobless Growth: India’s growth trajectory has been capital-intensive, generating insufficient quality jobs and pushing workers into insecure informal employment with limited social protection.
  • Over 85% of workers in India remain informally employed, including a large share within the organised sector.
• Gender Inequality In Economic Participation: Women’s economic participation remains constrained by unpaid care burdens, social norms, and safety concerns, limiting household incomes and overall growth potential.
  • PLFS 2023-24 reports female labour force participation at around 41.7%, though improved but still below male participation.

Evaluation of Key Recent Policy Interventions

• Social Security: Ayushman Bharat (PM-JAY) & Expansion to Seniors
  • Intervention: Providing ₹5 lakh health cover to bottom 40% and recently expanding it to all citizens aged 70+.
  • Effectiveness (High Impact/Implementation Gaps): The policy has been highly effective in financial protection, reducing Out-of-Pocket Expenditure (OOPE) from 62.6% (FY15) to 39.4% (FY22).
  • Critique: "Access" does not equal "quality." Supply-side constraints mean that beneficiaries often face refusal from private hospitals or are forced to pay bribes.
    • CAG also flagged key irregularities in implementation of this scheme.
• Labour Reform: The 4 Labour Codes & Gig Worker Rights
  • Intervention: Consolidating 29 labour laws into 4 codes and introducing social security for Gig and Platform Workers (2025 implementation push).
  • Effectiveness (Moderate/Evolving): This is a landmark shift, legally recognizing the "gig economy" (Uber/Zomato workers) for the first time. It attempts to formalize the informal.
  • Critique: The implementation is fragmented across states. Employers may overuse Fixed-Term Employment contracts to avoid permanency, increasing job insecurity.
• Financial Inclusion: JAM Trinity & DBT
  • Intervention: Jan Dhan-Aadhaar-Mobile (JAM) ecosystem for Direct Benefit Transfer (DBT).
  • Effectiveness (Very High Efficiency): It has successfully plugged leakages, saving the exchequer over ₹3 lakh crore by removing ghost beneficiaries. It ensured survival during crises (e.g., COVID-19).
  • Critique: It suffers from "Exclusion Errors" due to tech failures (biometric mismatches).
    • Furthermore, financial inclusion has not fully translated into "financial deepening", many accounts remain dormant or are used only for withdrawing subsidies rather than credit access.
• Housing: PM Awas Yojana (PMAY)
  • Recent Intervention: The Union Cabinet in June 2024 announced an assistance of 3 crore additional houses by 2029 under the government's PMAY-U and PMAY-G schemes.
  • Effectiveness (High Visibility): It addresses the most basic asset deficit. Ownership of a "pucca" house creates intergenerational asset stability and boosts dignity.
  • Critique: The focus is quantitative (number of units) rather than qualitative (livability). Many units are located in peripheries with poor connectivity to livelihood centers, leading to low occupancy in some urban clusters.

Measures to Strengthen Inclusive Development

• Strengthen Human Capital At The Bottom: Prioritise early childhood nutrition, foundational learning, and public health in lagging regions.
• Create Quality Employment: Align industrial, MSME, and skilling policies to generate labour-intensive, formal jobs.
• Gender-Responsive Growth Policies: Invest in care infrastructure, safety, and flexible work to raise women’s participation.
• Region-Specific Development Strategies: Move beyond uniform schemes to locally tailored interventions.
• Improve State Capacity And Accountability: Strengthen last-mile institutions and outcome monitoring to reduce exclusion.

Conclusion

India’s post-reform growth has widened opportunities, but deep structural inequalities prevent it from becoming fully inclusive. While recent policy interventions signal progress, uneven state capacity and implementation gaps blunt their impact. True inclusiveness will depend on employment-rich, regionally balanced, and human-capital-centred growth that spreads prosperity widely rather than concentrating it narrowly.