In the age we live in, the process of securing a persistent rate of higher economic growth is considered to be the ultimate means of achieving prosperity for all. Economists and policymakers insouciantly use the word 'inclusive growth' in penning down the objectives and rationale for every policy and reform measure It becomes pertinent thus to explore the underlying neo-liberalist idea of inclusive growth that fails to apply in evidence to the developingworld context (specifically to India in South Asia). The idea of inclusive growth has shaped our understanding of growth since the mid-1960s. The process of achieving such growth encompasses an inclusion of all sections as beneficiaries and partners in growth, and envisages that an inclusion of the excluded should be embedded in the growth process Such growth, as expected, by itself will then lead to a high elasticity of poverty reduction (higher reduction of poverty in per unit of growth), also reducing income inequalities at individual and group levels. Simon Kuznets (1966) explained how inequalities do not last for long. According to Kuznets, 'Economic inequality increases over time while a country starts developing; however, after a certain average income is attained, inequality begins to decrease'. The curve of inequality - the Kuznets curve - is inversely U-shaped, where inequalities tend to decline after a point because of two reasons: Firstly, with higher economic growth, the tax revenue of governments is likely to increase, enabling them to spend more on infrastructural development, education, healthcare and skill development; particularly in backward areas where the need of such social investment is felt more, in improving opportunities for people lacking the capital to grow. And secondly, after the initial period of economic growth and boom, the stated expectation of neoliberal advocates is that it will trickle down to people, by creating more jobs and incomes for many. Jagdish Bhagwati cites the need of Track 11 reforms in developing countries where he calls for the government to massively spend the economic benefits from liberalizing markets on healthcare, education etc for the initial growth to trickle down and achieve the principles of equity and sustainability. In her 2012 paper, Indira Hirway provides some useful empirical evidence from South Asia to debunk myths attached to 'inclusive' theoretical application of neo-liberalist version of economic growth. Hirway explains how, in spite of the adoption of pro-market policies in most South Asian countries, the level of income inequalities continue to widen
Out of the 14 Asian countries studied, inequality has increased in 11 - including Sri Lanka, China, Cambodia, India, Indonesia and Nepal. Malaysia and Thailand were the only two countries where inequalities decreased at the margin. In the case of India, the Gini coefficient (a measure of income inequality) rose from 0.44 to 0.47 during the last decade. The issue with the Indian case has primarily been with the implementation of Track II reforms where, in spite of higher, sustained economic growth levels from early 2000s, public spending on education and healthcare has remained drastically low (less than 3 per cent and 2 per cent of the GDP, respectively, till now). This has resulted in the accumulation of economic wealth in limited geographical city centers where economic prosperity is enjoyed by the few who directly accrue the benefits, leaving 'the others' entirely dependent on the government. Upward income mobility within these lower income classes remains an issue due to the lack of adequate education, health standards and access to increasing productive job opportunities.
1. What will happen when the expected inclusive growth is achieved?
A) There will be no inequalities in different sections of society.
B) There will be reduction in income inequalities at group and individual level.
C) There will be higher reduction of poverty in per unit of growth.
1) All (A), (B) and (C)
2) Only (A) and (B)
3) Only (A) and (C)
4) Only (B) and (C)
5) Only (B)
2. Which of the following statements is not based on Simon Kuznets' curve of inequality? Answer
in the context of the passage.
1) In a situation of higher economic growth, the government spends more on different projects
or development work, particularly in backward areas.
2) In a situation when a certain income is attained the inequality starts moving upward.
3) After the initial period of economic growth there is a phase of downfall resulting in
the loss of job opportunity.
4) Only (2) and (3)
5) Only (1) and (3)
3. Several statements with regard to 'inclusive growth' have been penned down. Which is the one that is not based on the given passage?
A) Inclusive growth has become a byword for the objectives of every policy and reform measures.
B) 'Inclusive growth' is nothing but a tool of the government to beguile the innocent public.
C) Inclusive growth implies inclusion of the excluded in the growth process.
1) Only (A) and (B)
2) Only (B) and (C)
3) Only (A) and (C)
4) All (A), (B) and (C)
5) Only (B)
4. What is/are the finding of the research paper of Indira Hirway? Select your answer on the basis of the facts mentioned in the passage.
A) That despite adoption of promarket policies in most southern Asia countries, the income inequalities have increased.
B) In the case of India, income inequality has risen during the last decade.
C) Out of 14 Asian countries studied, only Thailand and Malaysia have registered marginal decrease in inequality.
1) Only (A) and (B)
2) Only (B) and (C)
3) Only (A) and (C)
4) All (A), (B) and (C)
5) Only (C)
5. What has been the result of low spending on education and health care?
1) The economic wealth got accumulated in limited geographical city centers.
2) Very few people in limited city centers could successfully reap benefit, leaving the others entirely dependent on the government.
3) Due to the lack of adequate education, health standard and access to increasing productive job opportunities, the people of lower income classes remained deprived of upward income mobility.
4) All the above except (3)
5) All (1), (2) and (3)
Directions (Q. 6 - 8): Choose the word which is MOST SIMILAR in meaning to the word printed in bold as used in the passage
6. INSOUCIANTLY
1) intentionally
2) deliberately
3) casually
4) voluntarily
5) emphatically
7. ENVISAGES
1) visualize
2) ignores
3) avoided
4) disdained
5) discounted
8. DEBUNK
1) justify
2) establish
3) prove
4) uphold
5) disparage
Directions (Q. 9 - 10): Choose the word which is MOST OPPOSITE in meaning of the word printed in bold as used in the passage.
9. PROSPERITY
1) affluence
2) abundance
3) exorbitance
4) opulence
5) poverty
10. MASSIVELY
1) hugely
2) scantily
3) excessively
4) immensely
5) extreme
Directions (Q. 11 - 15): Each question below has two blanks, each blank indicating that something has been omitted. Choose the set of words for each blank that best fits the meaning of the sentence as a whole.
11. The sudden ____ has triggered some arbitrage ____ between offshore and domestic markets,
1) flight, liberty
2) transition, turn
3) stability, moment
4) variation, junction
5) volatility, opportunities
12. In line with the Centre's plan to try and _____ resolve tax disputes, a number of States too are working on similar proposals to ____ business sentiment and attract investments.
1) briskly, renovate
2) eagerly, hurt
3) quietly, update
4) expeditiously, restore
5) inactively, destroy
13. The probability is _____ for a La Nina event ___ to a good monsoon in India.
1) improving, leading
2) correcting, dominating
3) diminishing, taking
4) repairing, proceeding
5) fixing, occurring
14. The High Court _____ Presidents' Rule, restored the government in the state and ____ the
way for a floor test.
1) defeated, dug up
2) subdued, opened
3) quashed, paved
4) overcome, made
5) helped, laid
15. He said modern-day trade _____ are much more broad-based and not ______ only to tariffs and standards.
1) accession, enclosed
2) agreements, confined
3) compromises, shut in
4) accommodation, limited
5) affiliation, free
