For having discussion, on poverty, inequality and inclusive growth, there are two important points that are needed to be stated:(i) Poverty, inequality(and hence need for inclusive growth) and unemployment is inter-related issues as one cannot be appreciated without knowing the dimensions of the other; and(i) we need to distinguish between the concept of absolute poverty and the concept of relative poverty.

As far as first point is concerned, it need be made clear that a simple increase in the GDP may not be a sufficient condition(although a necessary condition) to enable all sections of the society – asset owners and asset – less to share in the outcomes of growth. On the contrary, empirical evidence has clearly demonstrated that the benefits of growth are disproportionately distributed(especially when an economy is in transition from a low-income category to a high-income category). With a time lag as the growth process continues, the distribution of income begins to become more even. This relationship between growth and distribution of income has given rise to kuznets’ famous hypothesis that has been reflected in kuznets’ inverted U-shaped curve.

Secondly, the absolute poverty explains a situation in which some persons, small or large in number, live in a state of impoverishment. In this pathetic situation, these persons(or groups of persons) fail to meet their basic needs and may live at bare subsistence, or even below subsistence. This however does not have any implication for the size of cake that is available for distribution. Here, again, two situations can be visualised. One, the size of the national cake may be so small, that it is not adequate to meet the minimum needs of all sections of the society. Two, the size may be fairly large, but the existing institutions and practices do not result in equitable distribution, so that a large part of national product goes to supplement the pockets of a few, and the large mass are left to take care of themselves. No matter what the situation may be, if a meaningful effort is to be made to lift poor persons to a respectable level of living, inclusive growth will be the answer.