Inclusive growth

Inclusive growth is a concept that advances equitable opportunities for economic participants during economic growth with benefits incurred by every section of society.

The definition of inclusive growth implies direct links between the macroeconomic and microeconomic determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension refers to changes in economic aggregates such as the country’s gross national product (GNP) or gross domestic product (GDP), total factor productivity, and aggregate factor inputs.

Inclusion is one of the most important words spoken with regard to diversity. But the most frequent spoken words among them could be inclusive growth. Inclusive growth basically means making sure everyone is included in growth, regardless of their economic class, gender, sex, disability and religion. Inclusive growth approach takes on long term perspective and the focus is on productive employment rather than merely direct income redistribution as a means of increasing income for excluded groups. Thus inclusive growth approach took a long term perspective of development. According to World Bank, the growth said to be inclusive when the growth to be sustainable in long run and it should be broad based across the sector and inclusive of large part of countries labour force. Inclusiveness should understand in the sense and focusing on equality of opportunity in terms access to markets, resources and unbiased regulatory environment for business and individual.

Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing countries. Nonetheless, an emphasis on inclusiveness—especially on equality of opportunity in terms of access to markets, resources, and an unbiased regulatory environment—is an essential ingredient of successful growth. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living.