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What Is Exclusive About 'Inclusive Growth'?

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Inclusive growth is the new mantra of national and international agencies, but what does it mean and how does one measure inclusion or the lack of it? In contrast to policy documents that discuss inclusive growth in loose terms, this paper makes an attempt to define the concept and aims to develop measures of inclusion. Given the methodological inadequacies of verifying a broad-based growth process in terms of mean-based averages of income and absolute-norm based measures of deprivation, the study proposes order-based averages for verifying the presence of broad-based growth and extent of inclusion of the poor in terms of the consumer expenditure distribution. In addition, to facilitate verification and comparison of both inter- and intra-group inclusion in a plural society, normalised measures with reference to both mainstream/overall and subgroup averages are worked out. The tentative estimates indicate that the growth process between 1993-94 and 2004-05 bypassed the majority and was not inclusive. At the national level, the inclusion coefficient is higher for the rural sector than for the urban. The association between median consumption and the inclusion coefficient across states is weak, which would also imply that there is no cross-sectional evidence to believe that growth in India has been inclusive.

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