Question

In Kerala's case, what is the significant trade-off observed between growth and inequality?

• A. High growth has led to reduced inequality.
• B. High growth has come at the cost of rising inequality.
• C. Low growth has resulted in stable inequality.
• D. Economic reforms have improved both growth and equality.

Answer 1

Answer:

B. High growth has come at the cost of rising inequality.

• While some inequality is inevitable in a growing economy, Kerala's experience with high growth under a neo-liberal regime raises concerns about the imbalance between growth and inequality, and the sustainability of growth that overlooks distribution.

• This situation prompts critical questions about the nature, source, and inclusiveness of growth. Inequality must remain at a tolerable level that does not undermine pro-poor or inclusive development.

• The comparative analysis of growth and inequality before and after reforms shows no clear, consistent pattern across Indian states.

• However, Kerala's case reveals a significant trade-off: high growth has come at the cost of rising inequality.