Former prime minister Manmohan Singh on Monday dismissed arguments that inequality could be reduced without high economic growth and cautioned against backlash from the people due to lop-sided development.
Releasing the India Social Development Report-2018 on ‘Rising Inequalities in India’, prepared by the Council for Social Development, Singh, considered the father of liberalisation in India as finance minister in 1991-96, said meaningful solution to the problems of poverty, ignorance and disease, which still inflict millions of Indians, could be found only in the framework of a rapidly expanding economy, which should go hand in hand with positive government intervention.
Singh, who delivered three years of over 9 per cent economic growth rate (in old GDP series) in a row in the first stint of his government, said positive government intervention would ensure that the fruits of development were also available to the people at the bottom of the ladder.
“Rapid economic development plus positive government intervention to reduce social and economic inequality has to be the main theme of modern policy making,” Singh said.
The report, which contains 22 chapters by eminent economists and social scientists on various aspects of inequality in India, states that the inter-state inequality in per-capita income has shown an increasing trend since 1991, the time when economic liberalisation started.
States with higher per-capita income and better infrastructure experienced higher growth and vice-versa, it adds.
Singh said India was one of the world’s fastest-growing large economies. But high growth is also associated with rising economic, social, regional as well as rural and urban inequalities where some social groups and regions have seriously lagged behind. “Rising inequality should concern us all because the adverse effects of economic and political inequality can impact our march towards inclusive and sustainable growth,” Singh said.
He said equity is complimentary to long-term prosperity and there should be level-playing field where all members of the society have a similar chance to contribute towards sustained growth and development; otherwise, it could have strong backlash. “The adverse impact of unequal economic opportunities, social relations and political power on development can be harmful for all,” he said.
Listing how the UPA-era schemes launched during his 10-year tenure have contributed to reducing inequality, Singh said effective implementation of right-based programmes could go a long way in reducing inequality in the country.