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Inclusive Growth: Concept, Measurement, and Rajasthan's Strategy
Inclusive growth is growth whose benefits are equitably distributed across income groups, regions, genders, and social classes. It is distinguished from aggregate growth by emphasizing the distribution of gains, not just their size. The UNDP and Planning Commission framework identifies four dimensions:
- Employment generation
- Access to health and education
- Reduction of poverty and inequality
- Regional balance
Per capita income alone is an inadequate welfare indicator: two states with identical per capita incomes but vastly different Gini coefficients or health outcomes have radically different levels of inclusive development. This limitation motivates composite indices such as the Human Development Index (HDI) and the Multidimensional Poverty Index (MPI).
Multidimensional Poverty Index (MPI)
The Multidimensional Poverty Index measures poverty across three dimensions — health, education, and standard of living — using 10 indicators. A household is "multidimensionally poor" if deprived in 33% or more of weighted indicators.
Rajasthan's MPI performance (NFHS data):
| Year | Rajasthan MPI (%) | India MPI (%) | Comparison |
|---|---|---|---|
| 2015-16 (NFHS-4) | 28.86 | 24.85 | 4 pp above national |
| 2019-21 (NFHS-5) | 15.31 | 14.96 | Now near-parity |
| Reduction | −13.55 pp (47%) | −9.89 pp (40%) | Rajasthan fell faster |
Source: NFHS-4 (2015-16), NFHS-5 (2019-21); cited in Rajasthan Economic Review 2024-25, Chapter 1
Rajasthan reduced MPI faster than the national average (47% vs. 40%), reflecting improvements in sanitation, electricity access, and maternal health. However, at 15.31%, Rajasthan remains above Kerala (0.55%) and Tamil Nadu (2.20%), and is comparable to Gujarat (11.66%), Bihar (33.76%), and UP (22.93%).
Human Development Index (HDI)
Rajasthan's HDI is approximately 0.629 (NITI Aayog estimates), below the national average of 0.645. The state is ranked 27th among Indian states on HDI.
The three HDI sub-components for Rajasthan:
- Life expectancy: 69.4 years (2016-20, SRS bulletin), below national average of 70
- Literacy rate: 66.1% (Census 2011); female literacy 52.1% — a persistent structural gap
- Infant Mortality Rate (IMR): decreased from 41.3 (NFHS-4, 2015-16) to 30.3 (NFHS-5, 2019-21), now below national average of 35
- Maternal Mortality Rate (MMR): 197 per lakh live births (SRS), above the national average
Rajasthan's Inclusive Growth Initiatives
The state government's strategy for inclusive growth aligns with its $350 billion economy target:
Chiranjeevi Health Insurance Scheme: Cashless treatment up to ₹25 lakh per family per year; approximately 1.3 crore families enrolled. Addresses SDG-3 (Good Health and Well-being).
MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme): Provides up to 100 days of guaranteed rural employment per household. Rajasthan has been among the top performers in generating person-days. The scheme directly supports SDG-8 (Decent Work and Economic Growth).
Indira Gandhi Urban Employment Guarantee Scheme (IGEGS): Urban analog of MGNREGS introduced by Rajasthan — provides employment to urban poor in urban local bodies. A pioneering initiative, now operational in all ULBs.
Mukhya Mantri Mahila Udyog Yojana: Financial literacy and credit access for women entrepreneurs; supports SDG-5 (Gender Equality) and SDG-8.
Rajasthan Skill Development Mission: Industry-specific vocational training; bridges the skill gap for urban and rural youth to transition to formal employment.
Direct Benefit Transfer (DBT): As of November 2024, cumulative DBT of ₹3,14,385.88 crore has been transacted; ₹27,494.31 crore transacted in 2024-25 (up to December 2024) with 5.71 crore beneficiaries. DBT ensures welfare benefits reach intended recipients directly.
Financial inclusion: 8,531 bank branches operational in Rajasthan as of September 2024. Credit-deposit ratio improved to 86.92%, surpassing the national average of 79.32%.