Redistribution, but not at the cost of growth
Contd from previous issue
There has been a paradigm change since then, primarily over the past few years. A key differentiator over the past few years has been a focus on service delivery, accountability and transparency, enabled through technology. Addressing issues of access are of immense importance in combating inequality. Access to healthcare, sanitation, drinking water, electricity, cooking gas, internet, houses and finance are just some areas in which giant leaps have been taken. The record speaks for itself. By addressing issues of access, a huge impediment towards greater wealth and income equality has been overcome. This has been achieved without any substantial increase in marginal taxation. Large scale cash transfers are also taking place, through the PM-KISAN scheme and through direct benefit transfers (DBTs). Human capital has also been receiving due attention. The world’s largest health insurance scheme is run in India. The focus has shifted towards measuring quality of education, achieved access to education. A new National Education Policy has been launched, the first in over three decades.
Much has been done in India to battle inequality over the past years, with the emphasis being on improving access to government benefits and services. This has been achieved not through any substantially larger increase in expenditure alone, but through a combination of many factors. First, budgetary were increased. However, this was accompanied by governance reforms that promoted accountability and transparency. Technology played a crucial role as an enabler of robust monitoring and evaluation systems. The result was efficient delivery of services to the bottom of the pyramid. At the same time, efforts have been made to boost the economy’s potential growth rate through a series of structural reforms, each of which addressed inherent inefficiencies in the economy. Redistribution and growth need not be competing policy goals. A robust economy is crucial in financing redistribution programmes. In turn, these investments in redistribution have a multiplier effect on the economy in the long run.
*The writer is Chief Executive Officer, NITI Aayog. Views are personal.