HPAS Main-2017 Paper-III, Unit-1(Sub Unit-2) Short Question= 8 Marks(150 words) Fiscal Policy, Fiscal Responsibility and Budget Management Act, 2003, Debt and Investment in India: Current Status, Growth and Development experience including Natural Resource Management.

Explain ‘growth with equity’ as a planning objective.

Solution:

Both growth and equity are the two important aspects of India’s five year plans. While growth refers to the increase in GDP over a long period of time equity refers to an equitable distribution of GDP so that the benefits due to higher economic growth are shared by all sections of population. Equity implies social justice. Growth itself is desirable but growth in itself does not guarantee the welfare of people. Growth is assessed by the market value of goods and services (GDP) and it may be possible that the goods and services that are produced may not benefit the majority of population. In other words, only a few with high level of living and money income may get the share of GDP. Hence, growth with equity is a rational and desirable objective of planning. This objective ensures that the benefits of high growth are shared by all the people equally and, hence, this not only leads to reduction of inequality of income, poverty promotion of egalitarian society but also enables everyone to be self-reliant. Therefore, to conclude, it can be said that growth with equity is the most important objective of an economic planning.