India, now the world’s fifth-largest economy, is often celebrated for its rapid GDP growth, booming tech sector, and surging unicorn startups. Yet, behind this glittering success lies a troubling truth: India’s economic growth is not inclusive. The country’s rising prosperity is being cornered by a tiny sliver of the population, while millions remain trapped in poverty or precarious livelihoods.
The Illusion of Growth
While the GDP numbers may paint a picture of progress, they mask growing disparities in income and wealth distribution. According to Oxfam, the top 1% of India’s population owns more than 40% of the country’s wealth, while the bottom 50% share a mere 3%. In other words, the benefits of economic expansion have flowed disproportionately to those already at the top.
Urban-Rural Divide
The inequality is not just economic but also geographic. Urban India, especially metro cities like Mumbai, Bengaluru, and Delhi, has enjoyed infrastructure upgrades, job opportunities, and access to quality education and healthcare. In contrast, rural India continues to struggle with agrarian distress, underemployment, poor health facilities, and inadequate schooling.
Jobless Growth
India’s growth in recent years has been described as “jobless.” While GDP has expanded, employment generation has stagnated. The informal sector, which employs over 90% of India’s workforce, has been hit hard by shocks like demonetisation and the COVID-19 pandemic. Formal, well-paying jobs have not kept pace with the influx of young workers entering the job market.
Tax Policy & Crony Capitalism
Taxation policies, often favouring corporations and the ultra-rich, have deepened the gap. Corporate tax cuts, loan write-offs, and privatisation initiatives benefit big businesses, while the average Indian faces rising costs of living, fuel prices, and shrinking public services. There are also concerns about crony capitalism, where a few industrialists amass power and wealth through close ties with political leaders.
Welfare Spending and Safety Nets
Though India has initiated schemes like MGNREGA, PM-KISAN, and free ration distribution, these remain stopgap measures. Public spending on education, health, and social welfare as a percentage of GDP is among the lowest among G20 nations. Without strong social safety nets, economic shocks disproportionately impact the poor.
Why Inclusive Growth Matters
Inclusive growth is not just morally essential—it’s economically smart. When wealth is concentrated, it stifles demand, limits social mobility, and fuels resentment. Inclusive policies—such as progressive taxation, universal basic services, and support for MSMEs—can drive sustainable growth by empowering more people to contribute productively to the economy.
Conclusion
India stands at a crossroads. It can either continue on the path of elite-driven capitalism, or reimagine growth to be broad-based and inclusive. For true development, GDP must rise alongside equity. Because a booming economy that leaves behind half its people isn’t progress—it’s a warning.
FAQ
Q1. What does it mean to say that India’s economic growth is not inclusive?
A: It means that the benefits of economic growth are not evenly shared across all sections of society. While GDP is rising, the majority of wealth is being accumulated by a small percentage of the population, leaving behind large sections—especially the poor, rural populations, and informal workers.
Q2. Who benefits the most from India’s current economic growth?
A: The top 1% of the population, including large corporates and wealthy individuals, benefit the most. According to several reports, this group holds a disproportionately large share of the nation’s total wealth.
Q3. Why is India’s growth often called “jobless growth”?
A: Despite economic expansion, the growth has not resulted in a proportional increase in employment opportunities, especially in the formal sector. Most new jobs are low-paying, informal, or gig-based, offering little security or benefits.
Q4. What factors contribute to economic inequality in India?
A: Key factors include:
Unequal access to quality education and healthcare
Tax policies favoring corporations
Regional disparities (urban vs rural)
Weak labor protections
Limited support for small businesses and agriculture
Q5. Has the government done anything to reduce inequality?
A: Schemes like MGNREGA, PM-KISAN, and Ayushman Bharat aim to provide some relief, but critics argue they are not enough. Public investment in health, education, and infrastructure remains low compared to global standards.
Q6. What are the consequences of rising inequality?
A: High inequality can lead to:
Reduced social cohesion and trust
Lower economic mobility
Political instability and unrest
Weaker domestic consumption
Increased poverty and marginalisation
Q7. How can India achieve more inclusive growth?
A: Through:
Progressive taxation
Strengthening public services
Investing in rural infrastructure and MSMEs
Expanding formal employment
Ensuring universal access to quality education and healthcare
Publish on JUNE 11,2025 by :selvi
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram