NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, November 3, 2015

Opinion: India has made rapid strides in economic growth, but how can the country maintain healthy GDP growth while addressing inequality among its citizens?

Klaus Schwab

Over 60% of the Indian population still lives on less than $2 (about Rs.130 at current rates) a day. In the World Economic Forum’sInclusive Growth and Development Report 2015, India is placed second highest in terms of net income inequality among 34 countries in the lower-middle-income group.

India has made rapid strides in economic growth, but how can the country maintain healthy gross domestic product (GDP) growth while addressing the inequality among its citizens? This will demand structural changes and investment in growth-spurring areas such as human capital, but also the ensuring of equality of opportunities to its citizens—access to basic nutrition, education, energy, finance and job and entrepreneurship opportunities.

Social entrepreneurs are a key stakeholder segment to engage in delivering such basic services and opportunities efficiently and effectively to the underserved in India. Every year, the Social Entrepreneur of the Year (SEOY) Awards organized by the Schwab Foundation and Jubilant Bhartia Foundation attracts hundreds of social entrepreneurs from all over the country. Some of them employ innovative, cost-efficient and often technology-enabled business models that deliver basic services to those who lack access. Others are working hard at removing barriers that prevent access.

These entrepreneurs are not only outstanding in the Indian context, but on a global level as well, as we at the Schwab Foundation and the World Economic Forum have seen confirmed time and again. Many of these organizations work at an impressive scale—serving millions of low-income households and transforming their quality of life. An example is Aravind Eye Care System in south India, which focuses on curing blindness among India’s poor. The hospital chain serves approximately 12,000-15,000 outpatient visits and 1,500 surgeries each day. Karuna Trust and its public-private partnership model serve over 2 million low-income clients by transforming government primary health centres into hubs of low-cost, high-quality healthcare delivery. Nidan has organized close to a million informal-economy workers across India into collectives and enterprises, secured their access to markets, technology and financial services and successfully influenced government policy on their social and economic inclusion.