G-20 redefines growth

Besides good intent and lofty goals to revive the sagging growth, one of the significant aspects of the recent G-20 summit is redefining the very concept of growth. The growth fundamentalists have always held that growth per se is enough. According to this conservatism, the growth will automatically percolate to the lower levels. But the experience worldwide reveals that there are many an impermeable membranes to block the flow of fruits of growth. This led to extreme concentration of wealth and humongous inequalities. The dominant paradigm was that growth would automatically eliminate poverty. But, as the UNDP observed, removal of poverty would automatically enable growth. Now, even the G-20 acknowledges this. Thanks to global recession new thinking has dawned on such a forum.

The G-20 Brisbane summit communiqué calls for raising global growth to deliver better living standards and quality jobs to be the highest priority. This is much more significant at a time when the world is witnessing jobless and even job loss growth. The emphasis on quality jobs is too underlined. The Approach Paper to Twelfth Plan also said that the Eleventh Plan period delivered mainly low quality and contract employment. Therefore, enduing and durable employment is a key imperative to ameliorate the conditions of impoverished masses. This is not just an egalitarian objective alone.

It is sound economics as such a strategy would boost the demand which itself is now declared as an objective of G-20. Such a strategy is much more relevant for India that enjoys a demographic dividend. Absence of such a strategy, as the Plan document itself observed, would lead to a demographic nightmare.

The speculative global finance is dampening productive investment. Given this experience, the G-20 call for greater public and private investment into infrastructural sectors is a welcome development. As India told earlier G-20 summit, it can absorb a trillion dollar investment in infrastructural sector. Thus changed global investment priorities would come in handy for India’s development.

Huge skill deficit in the market on one side and unemployment on the other is leading to colossal wastage of human resources. Knowledge economy cannot accept this. Therefore the G-20 summit rightly emphasized skill formation. The job market is also riddled with inequalities; the most pervasive one is the gender based inequalities. The G-20 members agreed to the goal of reducing the gap in work participation rates between men and women by 25 per cent by 2025.

But these postulates should translate into policy actions. The reforms process would be inclusive only if these actions deliver results on ground. To borrow the phrase used by UNDP, some are on main line while others are on loop line. This trajectory at the domestic or international level is unacceptable. Even the G-20 echoing this sentiment is a happy augury.