Our Healthy-Wealthy Poor

"Growth in the nineties averaged about 6% but now we are consistently doing better at 8%. This has led to a sense of complacency and even triumphalism amongst policymakers and the media. The ‘second fastest growing economy’ appears to be waiting comfortably for China to stumble so that we can perhaps even lay claim to being the fastest growing economy in the world.

Some among us look wistfully at 10% and wonder why with our demographic dividend we do not do significantly better than 8%. Others argue that even the current 8% growth is jobless in nature and that what we need is a lower rate coupled with jobs creation. Then there are the inclusive growth mandarins in the ruling party who simply want funds allocated to relevant vote banks irrespective of whether the extra funds are the product of faster growth or higher allocation from a smaller pie...."

Economictimes/The 8% complacency trap/Sumant Sinha

Comment:

Higher growth rates are the result of higher inflation targets, and if we choose inflation at 8% we can grow at 8%, if we choose inflation at 10% we can achieve a growth rate of 10% and so on. No doubt we are the youngest economy and the scope for boosting consumption is enormous in the years to come. But the composition of poor in our economy is also enormous and does not support the idea of choosing inflation and growth at 10% because the income of the poor is not increasing at the same rate. And, if we can make sure that their income also increases with the same rate we can choose to grow at whatever rate we like. Nevertheless the idea remains same INCLUSIVE-GROWTH. If our growth rate does not include the dream of making poor healthy and wealthy all wisdom will be of no use. Some grow and some choose the way to grow to grow. The choice is ours, we keep ourselves before the economy or we choose economy before ourselves. When we talk about economy we talk about rich and poor alike and the same time. But how can we forget about its composition. It is the demand of the poor which is going to drive the economy for a very long-period of time. The rich do not care about inflation, it simply does not matter to them or even if it matters it matter a little. They do not curtail consumption or fall short on our nutrition-calorie chart.