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Special Lecture by Ambassador Anil Wadhwa on
“Inclusive Growth: Reflections from Indian Experience and Collaborative Strategy towards Thailand and India”
at
The Seventh National Research Council of Thailand (NRCT) – Indian Council of Social Science Research (ICSSR) Joint Seminar
on Inclusive Growth, Poverty Eradication and Human Security
at World Ballroom, 23rd Floor, Centara Grand & Bangkok Convention Centre at Central World, Bangkok
24 August 2013 (1600 hrs – 1800 hrs)

1. Dr. SoottipornChittmittrapap, Secretary General of National Research Council of Thailand;Mr. WoravatAupinayukul, Former Minister of Science and Technology of Thailand; Prof. AbhijitSen, Member Planning Commission of India; Distinguished Scholars, Ladies and Gentlemen,

I am pleased to be here today at the seminar jointly organized by National Research Council of Thailand and Indian Council of Social Science Research. At the outset, I would like to congratulate the organizers for selecting very timely theme for the seminar on ‘Inclusive Growth, Poverty Eradication and Human Security’. I look forward to scholarly deliberations on this important topic in the next three days.  I would like to thank organizers for inviting me to speak today on “Inclusive Growth: Reflections from Indian Experience and Collaborative Strategy towards Thailand and India”.  Last week, we celebrated 66th anniversary of India’s independence and this is a good opportunity to reflect on India’s progress and share our experience with our close friend Thailand.

2. The preamble of our Constitution, which was adopted in 1950,describes India as a Sovereign, Socialist, Secular, Democratic Republic. These are the core values of the modern Indian nation. The ideals and the values that guided our freedom movement, led by Father of the Nation Mahatma Gandhi became the cornerstone of the Independent Indian Republic. India is plural, and pluralism is an integral part of Indian identity. Pluralism is an acknowledgment of diversity. In India, it is reflected in every aspect. Be it religion, language, ethnicity, political ideology, cuisine, or even geography - you will find a breathtaking diversity of all in India that co-exists peacefully.Historically, process of adaptation and interaction among various groups brought about, on the one hand, India’s characteristic diversity and, on the other, a composite cultural tradition. 


3. Our democratic system ensures that India remains an inclusive nation where every individual has a right to participate in governance as a matter of right. While democracy has floundered in many places in the region, it has gone from strength-to-strength in India, and is today held as an example across the world. In India, the policy decisions may take time to be finalized because of the vigorous debate that is a hallmark of democracy. However, such decisions are also long lasting, because they are based on consensus that emerges from this discussion. Our democracy is supported by an enlightened judiciary that enforces rule of law, and a vigorous and vigilant media. Media ensures that organs of government are on their toes, and perform their duties. We unsparingly analyze ourselves in fine traditions of what Noble Laureate Prof. AmartyaSen calls “the argumentative Indian”. I see this ability to scrutinize ourselves in full public glaze as one of strengths of our democracy.

4. For any developing countries like India, inclusive growth and a rapid increase in per capita income levels are development imperatives. Faster economic growth is necessary to provide growing opportunities to our people and to generate revenues to support inclusiveness programmes.India has achieved an average 7.8 percent growth in the 11thPlan period (2007-12), despite the fact that there were two global crises in this period. It is true that the current economic situation is difficult. The continuing crisis in the global economy has reduced growth everywhere. GDP actually declined in the Eurozone. It grew very slowly in Japan and the USA. It slowed down in China, and also other developing countries.Our own growth slowed down to 5% in 2012-13.At the moment, our first priority in India is to reverse this slowdown.

5. Rapid growth has the potential to contribute directly to inclusiveness because it creates more employment opportunities. While we need to accelerate growth, we do not view growth as an end in itself. Our real objective must be to improve the condition of lives of the ‘common man’, which is why we emphasize that growth must be inclusive.Inclusive growth basically means, “broad based growth, shared growth,”. It decreases the growth rate of poverty and increases the involvement of people into the growth process of the country. Inclusive growth has been projected as the strategic pillar of our current 12thfive year plan.

6. The progress towards inclusiveness is more difficult to assess, because inclusiveness is a multidimensional concept. Inclusive growth should result in lower incidence of poverty; broad-based and significant improvement in health outcomes; universal access for children to school; increased access to higher education and improved standards of education, including skill development; better opportunities for both wage employment and livelihood; improvement in provision of basic amenities like water, electricity, roads, sanitation and housing; and needs of the socially disadvantaged population. To achieve inclusive growth in all these dimensions requires multiple interventions, and success depends not only on introducing new policies and programmes, but on institutional and attitudinal changes.India’s policies aimed at stimulating growth in agriculture and in medium and small scale industries, combined with steps to promote education and skill development has produced a growth which is inherently more inclusive.

7. Economic growth models do not establish or suggest, however, an explicit causal-effect relationship between a country’s rates of economic growth and the resulting poverty reduction, although policymakers often assume an implicit connection. Several studies suggest that there is a correlation between inclusive growth and the level of public expenditure on social development including education and health. Literacy is arguably the most significant factor in poverty reduction as it enhances employability.

8. In India, there is progress in all these areas throughGovernment’s programmes such as the Total Literary Campaign, the Mid Day Meal Scheme, the Integrated Child Development Services, The National Rural Health Mission, the National Health Insurance Scheme, the Skill Development Mission, etc. Primary school enrollment is now near universal. Literacy has improved to 74% with male literacy 82% and female literacy 66%.In 2009, the Right to Education Act was passed, which guaranteed free and compulsory education to children between 6 and 14 years old. The 86thAmendment to the Constitution makes education a fundamental right. The Act also obliges private schools to admit and educate at least 25% of children free of cost. India’s public expenditure on health care is also steadily increasing.

9. In our quest for rapid growth, technology has been a great help. Technology has actually helped us to leapfrog certain stages of development.  For example, with nearly 800 million mobile phones, India has one of the world’s largest mobile phone networks. This has allowed unprecedented connectivity to the remotest part of the country.  While mobile phones earlier bypassed the need for fixed line telephony, they have now also made redundant the need to have computers to access internet. In India, many people access internet through mobile applications. There are some very basic, but useful applications available even in remote areas, which for example allow farmers to know the prices of their crops in faraway markets. Technology has also enabled us to develop the world’s largest biometric database to create a national Unique ID called AADHAR. It has enrolled more than 350 million Indians in less than three years.

10. A common complaint against government programmes is that they suffer from leakages, corruption, delays and poor targeting. The Government is taking a major step to deal with this problem by shifting several beneficiary oriented schemes to a direct transfer mode, using the Aadhaar platform. This has begun for selected schemes in selected districts this year. In due course, a wide range of benefits like scholarships for students, pensions for elderly, health benefits, Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) wages and many other benefits will migrate to direct transfer into bank accounts using Aadhaar as a bridge. This is an innovative step which will be watched by the entire global development community.

11. Agricultural growth has accelerated from 2.4 percent in the Tenth Plan to 3.6 percent in the Eleventh Plan. Poverty is falling faster even though there are disputes going on among the experts about the pace of change. Per capita consumption in real terms in rural areas has increased four times faster from 2004-05 than it did earlier. Better agricultural performance is an important reason why poverty declined faster. Although the share of agriculture in GDP has fallen to only 15%, about half of the population still relies on agriculture as its principal income source. What happens in agriculture is therefore critical for the success of inclusiveness.

12. We need to increase land productivity in agriculture so that we not only meet our rising demand for food, but also increase incomes of those dependent on agriculture. Paradoxically, we should not aim at increasing total employment in agriculture. In fact, we need to move people out of agriculture by giving them gainful employment in the nonagricultural sector. We have many new initiatives aimed at strengthening performance in the manufacturing sector and particularlysmall and medium industries are important as they generate more employment. Energy is a critical input for any growth process and our domestic energy resources are not sufficient to meet our growing needs. If we wish to keep our energy import requirement within reasonable limits, we must emphasize energy efficiency to moderate demand and we must increase domestic production of energy.

13. Improving the quality of governance in a vast nation like ours is a major challenge.The Government has taken several steps for improving governance and accountability. The Right to Information Act has become a key instrument of empowerment of people. There is a Government Procurement Bill which will make the process of Government procurements and contracts much more transparent, thus reducing the opportunities for corruption.

14. Since independence, wehave paid special attention to address disparities between socio-economic disadvantaged groups. These groups still lag behind the rest of the population in key socio-economic indicators. Fortunately, the gaps are closing but the pace at which this is happening is not satisfactory and certainly does not match expectations. Gender inequality is another important aspect which deserves special attention. Women and girls represent half the population and their socio-economic status is improving, but gaps persist.

15. Our dream of an economically resurgent and socially just India is that an India in which every citizen can expect to live a life of security and dignity with every opportunity to develop their own capacity to participate in and benefit from one of the great historical transformations that will take place in the coming decades. The re-emergence of India as a major economic player in Asia and the Worldwill involve many transformations. It will involve transformations in the way government functions, shifts from agriculture to non-agriculture, a rapid expansion in the manufacturing sector, a revolution in ICT which will change both government and business processes, an expansion in the population in urban areas and a corresponding transformation in the way urban governments work.

16. The development of India is necessarily a cooperative endeavour involving many stakeholders. It involves both the public sector and the private sector, the Central Government and the State Governments. It also involves the common people particularly those participating actively in devising new ways of addressing old problems. We have been reasonably successful in what we have achieved so far, but we need more years of rapid growth. The journey is long and requires hard work and commitment.

17. To sum up on the subject, I will quote from our President’s recent address to the nation on the eve of our Independence Day - Quote:Faster growth has given us the resources, but larger outlays have not translated into better outcomes. Without inclusive governance, we cannot achieve inclusive growth. For a developing country of more than 1.2 billion people, the debate between growth and redistribution is vital. While growth builds the scope for redistribution, redistribution sustains growth over time.  Both are equally important. A disproportionate emphasis on any one, at the expense of the other, can have adverse consequences for the nation. – Unquote.In conclusion, I would like to say that some elements of India’s this unique journey towards achieving inclusive growth will be useful to other developing countries including Thailand. This seminar is an excellent opportunity to share and exchange our experiences in this field with each other to develop a broad strategy input for Governmentsfor betterment of our ordinary citizens.

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