Organisation for Economic Co-operation and Development (OECD) defines Inclusive growth as the economic growth that is distributed fairly across society and creates opportunities for all. It refers to ‘broad-based’, ‘shared’, and ‘pro-poor growth’.
Inclusive growth meets the objectives of inclusiveness and sustainability together:
1. Demand led growth: Inclusive growth leads to a wider distribution of wealth which creates a demand in a country and hence leads to domestic demand-driven growth.
2. Environment friendly: With better wealth distribution people move away from polluting sources of energy such as wood, cow dung, etc and adopt more environment-friendly sources such as LPG which further improves environmental sustainability (SDG 7, 14).
3. Gender equality: Inclusive growth addresses the structural and fundamental problems in society and the economy. E.g.: current strategy to empower women (SDG 5). These strategies build strong foundations that are more sustainable for long term transformations.
4. Pro vulnerable: Growth can be inclusive and pro-poor, if and only if the incomes of poor people grow faster than those of the population as a whole, i.e., inequality declines. By focusing on inequality, inclusive growth could lead to optimal outcomes for both poor and non-poor households and lead to capability of citizens.
5. Job led growth: Inclusive growth focuses on productive employment rather than income redistribution as a means of increasing incomes for excluded groups.
6. According to a recent OECD study, even in developed countries, redistribution schemes cannot be the only response to rising poverty rates in certain segments of the population. Economic policies have to look at growth over a sufficiently long term to factor in demographic aging and the rise in healthcare costs.
Thus, inclusiveness and sustainability are interwoven in the concept of inclusive growth. Therefore, we must focus on SDG goals and circular economy on a war footing / priority basis.