QUESTION : India’s reported rise to the world’s fourth-largest economy is often presented as a national achievement. How should this achievement be evaluated within the broader context of persistent socio-economic inequalities in the country? – Joe George
ANSWER : Saji Mathew Kanayankal CST
According to recent reports, India has emerged as the world’s fourth-largest economy, surpassing Japan with a GDP valued at approximately USD 4.51 trillion, close to Japan’s USD 4.46 trillion. Projections further suggest that India may overtake Germany within the next three years, reaching an estimated GDP of USD 7.3 trillion. This achievement, however, assumes particular significance when viewed against persistent structural challenges, including uneven private investment, rising unemployment, and periodic slowdowns in manufacturing and mining sectors. Moreover, the global economic environment, marked by geopolitical conflicts, trade disruptions, and heightened tariffs, notably those imposed by the United States on Russian oil purchases, adds further complexity. Despite these constraints, India’s growth has been widely described as a sign of economic “resilience amid persistent global trade uncertainties.”
The moral evaluation of an economy cannot be reduced to growth metrics alone; rather, it must be assessed in terms of distributive justice… and the preferential option for the poor.
Although many economists and policymakers, particularly those aligned with the so-called Godi media who enthusiastically amplify the narrative of “Modi magic,” seek to persuade the public that crossing an arbitrary economic threshold signifies a remarkable national achievement, proponents of GDP-driven development often neglect more fundamental questions: growth for whom, and to what end? Where is this growth directed, and who are its actual beneficiaries? How does it advance the common good? And, most importantly, does this growth translate into improved nutritional well-being and everyday living conditions for ordinary citizens?
The GDP Mythology and the Indian RealitY
When we celebrate GDP growth, we should not ignore the realities that exist on the other side of such triumphalist narratives. As has been rightly observed, “India’s rise to 4th place is not primarily a story of prosperity; it’s a story of arithmetic.” India overtook neighbouring China as the most populous nation in 2023, and this demographic fact significantly shapes the interpretation of aggregate economic indicators. According to the World Bank, India’s per capita GDP stands at approximately $2,880, far below that of advanced economies. By comparison, Japan’s per capita GDP is about $34,000 and Germany’s is nearly $56,000. These countries are widely recognised for robust infrastructure development, world-class manufacturing, public safety, strong social security systems, higher life expectancy, and relatively lower rates of unemployment and inequality.
The near-obsession with overall GDP figures reflects the logic of a finance-driven neoliberal economic paradigm. While projecting impressive arithmetic, it often obscures the lived realities of ordinary citizens and the actual condition of their livelihoods. Although this tendency is part of a broader global trend, it appears particularly pronounced in India, which is frequently cited as one of the ‘most unequal economies in the world’.
When growth becomes detached from the well-being of the vulnerable, it risks legitimising exclusion under the guise of national progress.
In global rankings, India remains around 122nd in per capita income, trailing countries such as Vietnam, Sri Lanka, and the Philippines, and only marginally ahead of Bangladesh. Although per capita income has nearly doubled over the past decade, its absolute level remains low, raising persistent concerns about the inclusivity of growth and the distribution of its benefits. Approximately 800 million people continue to depend on subsidised food grains, while infrastructure development remains decades behind in many regions. India ranks 130th out of 193 countries on the Human Development Index, and its position in the Global Hunger Index is 105, placing the country in the “serious hunger” category alongside Pakistan and Afghanistan. Furthermore, 13.7% of the population is undernourished; 35.5% of children under five are stunted; and 2.9% of children die before reaching their fifth birthday. While these appear as statistical indicators, they are not mere abstractions; they represent millions of children whose physical and cognitive development has been irreversibly impaired by malnutrition.
This contrast reveals the central paradox of India’s economic trajectory: while the nation is celebrated as one of the world’s largest economies, the average citizen’s income remains modest, and for many, deeply inadequate. Furthermore, a growing number of young people, especially the educated and skilled, continue to migrate abroad in search of employment opportunities and improved living conditions, thereby highlighting the limits of GDP-centred narratives of national success.
Disparity between Rich and the Poor
One of the most urgent socio-economic and moral challenges confronting present India is the widening disparity between the rich and the poor, manifested in the extreme concentration of wealth in the hands of a small elite. Such inequality is not merely an economic concern but a question of justice, human dignity, and the common good. The World Inequality Report 2026 identifies India as one of the most unequal countries in the world: the top 1% of the population holds more than 40% of the nation’s wealth, while the richest 10% control nearly 65%. Income distribution is similarly skewed, with the top 10% receiving approximately 58% of national income, whereas the bottom 50% receive only 15%. Although the average annual income in India is estimated at around USD 7,400 (approximately ₹6.49 lakh), this aggregate figure conceals severe stratification: the top 1% record a per capita income of USD 168,813 (₹1,54,49,600), the top 10% about USD 35,901 (₹32,85,600), while the bottom 50% survive on only USD 1,128 (around ₹1,00,000). Such figures reveal not only inequality of outcome but also deep structural asymmetries in access to opportunity, security, and social participation.
The central question is not whether the economy is growing, but whether growth is oriented toward justice, whether it enhances the dignity of all, protects the poor, and serves the common good rather than intensifying structural exclusion.
This concentration of wealth has significant ethical consequences. It constrains domestic consumption because the affluent tend to save disproportionately while the poor lack purchasing power, thereby limiting inclusive growth. More importantly, inequality shapes living conditions, social status, political agency, and long-term capacity for investment in business and agriculture. The moral evaluation of an economy cannot be reduced to growth metrics alone; rather, it must be assessed in terms of distributive justice, the universal destination of goods, solidarity, and the preferential option for the poor. Hence, dominant narratives of GDP growth require critical scrutiny within this distributive framework. As has been remarked, GDP is “not merely a misleading metric; it is a deliberate construct designed to distract public discourse from the cruelty being pursued by the corporate–communal nexus.” When growth becomes detached from the well-being of the vulnerable, it risks legitimising exclusion under the guise of national progress.
The World Inequality Report further indicates that inequality in India has accelerated since the early 2000s, with a particularly sharp concentration among the billionaire class, an emerging phenomenon some scholars describe as a “Billionaire Raj.” In such a context, economic expansion tends to benefit large corporations and multinational entrepreneurs disproportionately, while policy priorities and legal frameworks increasingly appear aligned with elite interests. This trajectory represents a serious distortion of development: it reduces human flourishing to market accumulation, weakens social cohesion, and undermines the moral foundation of democracy by enabling wealth to translate into political influence. Therefore, the central question is not whether the economy is growing, but whether growth is oriented toward justice, whether it enhances the dignity of all, protects the poor, and serves the common good rather than intensifying structural exclusion.
Impact in the Socio- Political Realm
In evaluating GDP growth, it is necessary to examine not only aggregate outcomes but also the social agents and sectoral structures that generate such growth. In India, a substantial portion of GDP is produced by capital-intensive service sectors and large corporate enterprises, whereas agriculture and the unorganised informal economy, despite employing the majority of workers, contribute only marginally to national output. Nearly 45% of India’s workforce remains engaged in agriculture, which contributes only about 18% to GDP. By contrast, capital-intensive sectors such as information technology, finance, and real estate account for more than half of GDP while employing roughly 30% of the workforce, largely concentrated in urban centres.
Proponents of GDP-driven development often neglect more fundamental questions: growth for whom, and to what end? Where is this growth directed, and who are its actual beneficiaries? How does it advance the common good? And, most importantly, does this growth translate into improved nutritional well-being and everyday living conditions for ordinary citizens?
This structural imbalance exposes the limits of GDP as an indicator of social well-being, since economic expansion in such sectors does not necessarily translate into broad-based livelihood security or improved quality of life. The middle class, often portrayed as the principal beneficiary of growth, has become increasingly vulnerable, not only being left behind but also at risk of downward mobility. Policies such as demonetisation disproportionately disrupted small-scale industries and local entrepreneurship, and the COVID-19 pandemic further deepened insecurity across large segments of the population. As Alfredo Saad-Filho the noted Brazilian economist, argues, neoliberalism operates through “exploitation and social domination based on the systematic use of state power to impose, under the ideological veil of non-intervention, a hegemonic project in all areas of social life.”
This raises a fundamental ethical question: in what meaningful sense can India be described as a “large” economy when its citizens remain, on average, vastly poorer than those in developed societies? It is possible for the IT sector to flourish, stock markets to surge, and GDP figures to climb, yet these macro-level achievements offer limited consolation to a population still struggling with basic necessities such as food, clothing, and shelter.
Employment Opportunities and Its Hurdles
The labour market reveals an even more troubling dimension of this paradox. Nearly 90% of India’s workforce remains trapped in the informal sector, characterised by low productivity, limited income security, and minimal social protection. The Economic Survey 2023–24 estimates that India must generate 7.85 million non-farm jobs annually until 2030 to absorb the expanding workforce, while other forecasts suggest that at least 10 million formal-sector jobs per year are required. Although official statistics report an unemployment rate of 3.2% in 2023–24, this figure masks the severity of labour distress: it categorises as “employed” those who worked even one hour in the previous week and includes unpaid helpers in household enterprises, thereby failing to capture underemployment and the quality of work. The more accurate picture is one of disguised unemployment, where individuals are technically employed but earn below living wages and contribute minimal economic value. Furthermore, 57.3% of workers are self-employed, often not by choice but by necessity, reflecting a survival economy rather than genuine entrepreneurship. In this context, grand narratives of a “trillion-dollar economy” and an “economic powerhouse” appear ethically hollow when one in three children is stunted by malnutrition and millions lack access to basic sanitation, clean water, and reliable electricity.
It is possible for the IT sector to flourish, stock markets to surge, and GDP figures to climb, yet these macro-level achievements offer limited consolation to a population still struggling with basic necessities such as food, clothing, and shelter.
These outcomes are not accidental but are embedded in broader political-economic dynamics. Across the world, governments increasingly shape policies in favour of neoliberal frameworks that prioritise multinational corporations and large capital. In India, this capture appears particularly acute: the growing stranglehold of corporate interests, combined with the consolidation of crony capitalism, has enabled a systematic transfer of public assets, including natural resources, into private hands. While corporate profits have surged, labour’s share in national income has sharply declined, signalling an economy that rewards capital accumulation while eroding the dignity and security of work.
This crisis cannot be reduced to a mere failure of governance or morality; rather, it points to an impending socio-economic disaster rooted in structurally unjust arrangements. Inequality, moreover, does not operate in isolation. The corporate–communal nexus intensifies social fragmentation by mobilising identity-based divisions, consolidating political dominance while diverting public attention from the deeper realities of distributive injustice. Such a trajectory erodes solidarity, weakens democratic participation, and violates the moral imperative to prioritise the poor and the vulnerable. India’s celebrated GDP milestones may indicate that the economy is active and expanding, but they do not reveal whether this economic activity is translating into improved lives for the majority. Judged against broader development indicators, the evidence suggests that it is not.
