"High growth rate alone is not sufficient to reduce poverty. Poverty can effectively be eradicated only when the poor start contributing to growth by their active involvement in the growth process." Substantiate with suitable examples.

  "High growth rate alone is not sufficient to reduce poverty. Poverty can effectively be eradicated only when the poor start contributing to growth by their active involvement in the growth process." Substantiate with suitable examples. 

(10 marks, 150 words) Answer:

Rapid pace of growth is unquestionably necessary for substantial poverty reduction, but for this growth to be sustainable in the long run, it should be broad-based across sectors, and inclusive of the large part of the country’s labor force. 

The Indian Constitution and five year plans state social justice as the primary objective of the developmental strategies of the government, with emphasis on poverty alleviation. The government's approach included rapid economic growth, work generation, redistribution etc., and these have been attempted through various programmes but they have not resulted in a radical change in the ownership of assets, process of production and improvement of basic amenities to the needy. While the total population below the poverty line fell from about 55 per cent in 1973-74 to 22 per cent n 2011-12, it has fallen to 22 per cent. it has also resulted in widespread inequality (as per World Inequality report, 1% Indians had more than 50% wealth). 

The main hindrances to poverty eradication include unequal distribution of income and assets, denying the poor access to resources, corruption and poor implementation, non-participation of local level institutions in programme implementation, structural issues like poor support to labour intensive MSMEs, unsustainable agriculture, large informal sector, poor human resources, premature deindustrialization etc.

Rapid and sustained poverty reduction requires inclusive growth that allows people to contribute to, and benefit from, economic growth. This approach takes a longer term perspective as the focus is on productive employment, rather than on direct income redistribution, as a means of increasing incomes for excluded groups. 

Making poor part of growth story:

Poor can contribute to growth, and benefit from it, when growth takes place in the sectors in which the poor work (e.g. agriculture, MSMEs, informal sectors), occurs in places where the poor live (e.g. undeveloped areas with few resources), uses the factors of production that the poor possess (e.g. unskilled labour), and reduces the prices of consumption items that the poor consume (e.g. food, fuel and clothing). The recent focus on doubling farmers' income, improve access to credit through MUDRA, Stand Up India etc, focus on the worst 100 districts, increase formalization, financial inclusion, inflation management, self employment promotion, social infrastructure creation etc. can all be seen as measures in this regard. 

Thus, only through the empowerment of hitherto marginalised communities by grassroot participatory development and full scale support of governmental agencies complemented by civil society groups, we can bring inclusive, sustainable and holistic growth in the nation.