Indian Economy: The Dichotomy of Growth & Inequality

Dr. Ashraf Pulikkamath

English

India’s fast-growing economy is predicted to reach high middle-income status by 2047, the centennial of Indian independence. Recently, India has made great strides in eliminating extreme poverty. Since India surpasses China as the world’s most populous nation, the demographic dividend of the economy has to be noted. The upsurge of the young and skilled population will accelerate India’s economic growth in the coming years. However, growth and inequality have historically been complicated in India. Since 1991’s economic liberalisation, India’s economy has expanded to become the fifth-largest and richest in the world. A large, young population, a burgeoning middle class, and a booming technology have contributed to this growth. The 1991 economic policy terminated the Hindu growth rate, and severe poverty, and elevated Foreign Direct Investment, infrastructure, education, and healthcare despite liberalisation’s downsides. At the same time, the gap between the affluent and poor in the Indian economy is rising rapidly. Urban-rural disparities often worsen this economic inequality. Unparallel cultural differences in India exacerbate the social disparities across economic, political, and social domains. For instance, India ranks poorly on several non-economic indices, such as the Human Development Index and the Gender Development Index. Many domains cause this dichotomy, including poor infrastructure, complicated regulations, a large informal sector, unequal access to high-quality education and healthcare, caste system, etc.