On Measuring Inclusiveness of Growth in Pakistan.

1. INTRODUCTION
Increasing level of inequilities in societies has diverted the attention of policy makers towards the new development paradigm of “Inclusive Growth” across the developing world especially. Despite the achievement of reduction in extreme poverty 60.3 percent of the population still lives under $2-a-day poverty line in Pakistan. Gini coefficient increased from 30.3 percent (1993), to 33 percent (2006)1 indicating that growth has been uneven and the gap between haves and have-nots widened over the time. A small segment of the population is benefiting fruits of growth to a large extent leaving large segment of the society deprived of basic needs; 51 percent of the population is suffering from severe deprivation of education and 29 percent with health.2 The prevailing inequalities in Pakistan have reslted in 31.5 percent3 loss in human development which could have been improved otherwise. Different socio-economic indicators show that the disadvantage groups including poor, people living in rural areas have not benefited proportionally from economic growth.4 Income inqualities can hamper the growth through lowering the impact on poverty reduction of a given rate of growth, and thereby reduce the growth. Furthermore inequalities can operate through political (in)stability and social cohesion channels to dissuade economic growth [Ali and Son (2007)]. In this back drop, reducing inequalities has become a major concern of development policy across the globe especially so for developing countries generating interest in inclusive growth. Inclusive growth ensures fair and equal access to all stratum of society, including disadvantaged and marginalised, to opportunities created [Ali and Son (2007)].