Inclusive growth and Sustainable development

The term Sustainable growth became prominent after the World Conservation Strategy Presented in 1980 by the International Union for the Conservation of Nature and Natural Resources. Brundland Report(1987) define sustainable development as the a process which seek to meet the needs and aspirations of the present generation without compromising the ability of the future generation to meet their own demands.

Natural resources are limited and thus sustainable development promotes their judicious use and put emphasis on conservation and protection of environment.Global warming and Climate change has brought the issue of Sustainable development in prominence.

Inclusive Growth is economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society.Indian Plans after the independence were based on the downward infiltration theory, which failed to bring equitable growth to all the sections of the Indian society.

Approach paper of 11th five year plan talked about “Inclusive and more faster growth” through bridging divides by including those in growth process who were excluded. Divide between above and Below Poverty Line, between those with productive jobs and those who are unemployed or grossly unemployed is at alarming stage.

Liberalization and Privatization after 1990’s have brought the nation out of the hindu growth rate syndrome but the share of growth has not been equitably distributed amongst different sections of Indian Society.

Various dimensions of Inclusive growth are:-

  1. economic
  2. social
  3. financial
  4. environmental

Important issues that are needed to be addressed to achieve the inclusive growth are:-

  1. Poverty
  2. Unemployment
  3. Rural Infrastructure
  4. Financial Inclusion
  5. Balanced regional development
  6. Gender equality
  7. Human Resource Development (Health, Education, Skill Development)
  8. Basic Human Resources like sanitation, drinking water, housing etc.

Government has launched several programs and policies for Inclusive growth such as:-

  2. Jan Dhan Yojna
  3. Atal Pension Yojna
  4. Skill India Mission
  5. Deen Dayal Upadhyaya Gram Jyoti Yojana
  6. Pradhan Mantri Suraksha Bima Yojana
  7. Pradhan Mantri Jeevan Jyoti Bima Yojana
  8. Sukanya Samridhi Yojana
  9. Pradhan Mantri   Garib Kalyan Yojana
  10. Jan Aushadhi Yojana (JAY)
  11. Nai Manzil Scheme for minority students
  12. The Pradhan Mantri Awas Yojana (PMAY) or Housing for all by 2022


Foreign Direct Investment Foreign Portfolio Investment
FDI is an investment made by a company or individual in the business of another country in the form of either establishing a new business or acquiring the existing business. FPI is an investment made by a company or an individual in the stock markets or debt markets of another country. FPI investors merely purchase equities/shares/bonds/debentures of foreign based countries.
FDIs are mainly made in Open Economies as opposed to tightly controlled closed economies. FPIs are mainly made with the objective of making quick profits by buying and selling shares, bonds and debentures.
FDIs are made for a longer period as the foreign investor’s controls and owns the companies in which they have invested. FPIs are made for shorter periods as the foreign investor do not own the companies and only invest in shares of the existing companies.
FDIs are much Stable. FPIs are highly volatile.
As per Organisation of Economic Cooperation and Development (OECD), the threshold for an investment to be considered as FDI is 10 percent or more ownership stake. As per Organisation of Economic Cooperation and Development (OECD), investment of less than 10 percent in foreign companies is treated as FPIs. All FPI taken together cannot acquire more than 24 per cent of the paid-up capital of an Indian Company.
FDIs are normally categorised as being Horizontal or Vertical in nature.


·         A Horizontal investment refers to the foreign firms establishing the same type of Business operations in the host country as it operates in his home country.

Example; Apple opening up Apple manufacturing unit in India.

·         A Vertical investment refers to the foreign firms establishing different but related business in host countries. Example: Hyundai Motors acquiring or establishing a company in India that supplies car spare parts/raw materials required for manufacturing Cars by Hyundai.

FPI investor includes Foreign Institutional Investors (FIIs), Foreign Qualified Investors (FQIs).


  • Institutional investors are big institutions like Asset Management Companies, Mutual Funds, Insurance Houses etc. RBI has mandated such big institutions to established to make investments in India’s security markets.
  • FQIs are individual investors or associations residing in Foreign countries. FQIs are small individual investors who invest in foreign countries securities.


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