Annex 2c Part1 Inclusive Growth in India Issues Consultations829

8/12/2019 Annex 2c Part1 Inclusive Growth in India Issues Consultations829

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India

Inclusive Growth Issues

Consultations

August 29, 2007New Delhi


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Context Growth has been stellar: 6% p.a since the mid-

1980s, and over 8% per annum in the past fouryears

But poverty impact of growth has been muted:poverty declined from 36% in 1993/94 to 28% in2004/05, a 0.8% point reduction p.a. comparedto 1.6% poverty reduction p.a. in Bangladesh

and Nepal This has raised concerns that Indias growth is

not inclusive or its benefits are not widely shared. Close to 300 million still live in deep poverty at

less than a dollar a day.


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Four reasons that help to explainIndias growth is not adequately

inclusive. Growth has diverged across regions, leaving behind the

large populous states of North Central and North EastIndia.

Growth has not been creating enough good jobs, thatprovide stable earnings for households to climb and stayout of poverty.

Growth in the agriculture sector, which employs morethan half of Indias workers, has been an anemic 2%.

Growth has left behind key sections of the population --females, the 90 million tribal population, some SCgroups religious minorities, -- lagging behind in jobopportunities, earnings, and human development.


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Financial Times, August 14, 2007

Underlying all this is Public services fail the

poor and are weakest in the poorer states


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Growth Rates have been lowerin the poorer states


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Employment is dominated byinformal sector jobs

52.3 50.0 48.3 52.4

31.6 34.3 35.5 31.1

16.1 15.7 16.2 16.5

0%

20%

40%

60%

80%

100%

1983 1993-94 1999-00 2004-05

Self Employed ( percent) Casual Workers ( percent)

Regular Workers ( percent)


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Wage Growth is heavily

concentrated at the top end

0

25

50

75

100

125

150

175

200225

250

275

300

325

p2 p7 p12 p17 p22 p27 p32 p37 p42 p47 p52 p57 p62 p67 p72 p77 p82 p87 p92 p97

Percentiles

Realdailywage,9

3-94Rs

1983 1993-94 2004-05 mean 1983 mean 1993/94 mean 2004/05


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Public Services Weak in the poorerregions: e.g. Immunization Coverage


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Exclusion

Female labor force participation rates have remainedstubbornly low despite rising education levels among womendue to absence of opportunities.

Significant wage discriminationAmong casual laborers,women get about half the wages of men. Less than one thirdof this gap can be explained by conventional factors such asskills, location, industry, etc.

Access to Finance - Rural Finance Access survey, 87 percentof the poorest households surveyed (marginal farmers) do nothave access to credit, the rich pay a relatively low rate (33percent), the poor pay rates of 104 percent and get only 8percent of the credit.


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A special Issue is the Tribal Populationconcentrated in some of poorest butmineral and forest rich areasbut

cannot take advantage of those assets

Alth h SC h d


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Although SC groups have made progress,large sections of SC and ST groups areagricultural workers, the poorest earners


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What is the Bank doing? The CAS lays a strategic emphasis on the poorer

regions

ProjectsRural Livelihoods projects, Rural Roads,VET program, Rural Credit Cooperatives,Decentralization, support for state level reforms fordevelopment efforts

Major focus on inclusion in economic work: DPR,Social Protection, On-going Work PovertyAnalysis, Employment Study, Lagging Regions,North Eastern area

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Annex 2c Part1 Inclusive Growth in India Issues Consultations829