Economic growth has been the primary goal of economic policies, and the principal measure of an economy's success. In the last few decades, economic growth benefitted mankind in multiple ways. But alongside these benefits, it has also generated significant issues and a series of converging challenges. In light of this, answer the following: (a) What was the rationale behind GDP growth being considered the pillar of economic policies the world over in the past few decades? (b) Explain the need to go beyond GDP growth and reassess our measures of development. Identify some of the components that need to be complemented with GDP growth going forward.

(a) GDP growth was a proxy to a nation's development. It was a goal for governmental policies.

Why GDP matters?

→ Shows real tangible growth in physical and financial capital.

→ higher GDP, more employment, less poverty

→ Higher the GDP, more the taxes, more the welfare measures that can be financed

→ GDP acts as an objective criteria used by investors to decide investment policy in the countries.

→ National pride that country is growing.

→ Belief of trickle-down development

→ Glamorisation of GDP and GDP growth by international institutions like IMF, WTO, WEF

(b) However GDP growth has not led to inclusive growth and inequalities have sharply increased.

Why beyond GDP?

(i) Unequal benefits to different sections According to Oxfam report, 1% Indians hold 58% wealth. Thus the benefits have not percolated down to the grassroots.

(ii) Job-less growth

• only service sector grew which is not labour intensive

(iii) Human development has not taken place

• violence against women
• As per UNICEF, every 2nd child in India is malnourished
• quality of education, healthcare has not improved
• India ranks 129/189 in HDI by UNDP

(iv) Lack of inclusive growth

• female labour force participation remained low
• Agricultural growth remains low

(v) lack of sustainability

• Environmental damage
• Climate change, pollution has all the more increased.

Complementing GDP

Some of the following components should be integrated with GDP growth :-

(i) Human Development Parameters • health profile • educational growth • gender justice should be promoted • Create 'Human Capital Product' as a category of accounting.

(ii) Employment growth • focus on employment for labour intensive sector • encourage MSME

(iii) Green-GDP • environmental cost accounting • Use of sustainable practices • Discouraging polluting industries

(iv) focus on social capital • mutual trust between society members. • building harmony • reducing regional inequalities • decentralisation of development • Role of women in development → 'pink-GDP' to calculate GDP contribution by women • Reducing social evils like mob lynching, Sexual violence • Including LGBT section.