Discuss two development strategies that the Indian government has adopted to promote inclusive growth. Explain how each strategy helps reduce poverty and inequality.
Answer
1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides at least 100 days of wage employment to every rural household, generating income for the poor, creating rural assets, and reducing migration. 2. Direct Benefit Transfer (DBT) channels subsidies and welfare payments directly into beneficiaries' bank accounts, minimizing leakages, ensuring that the intended poor receive the full benefit, and thereby lowering inequality.
Step-by-step solution
- Identify a strategy aimed at generating employment for the poor – MGNREGA.
- Explain its key feature: 100 days of guaranteed wage work per year for rural households.
- Show how guaranteed wages increase household income, build rural assets, and curb seasonal migration, thereby reducing poverty.
- Identify a financial inclusion strategy – Direct Benefit Transfer (DBT).
- Describe that DBT directly deposits subsidies, pensions, and other welfare payments into beneficiaries' bank accounts.
- Explain that direct transfers reduce corruption and leakage, ensuring the poor receive the full amount, which helps narrow income inequality.
- Summarize that both strategies target different dimensions of poverty – income and access to benefits – and together promote inclusive growth.
Common mistake: Listing schemes without linking their mechanisms to poverty reduction
Concept tested: Inclusive development strategies
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