{"id":45359,"date":"2025-06-13T20:57:44","date_gmt":"2025-06-13T15:27:44","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=45359"},"modified":"2025-06-26T15:40:57","modified_gmt":"2025-06-26T10:10:57","slug":"india-growth-paradox","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/13-06-2025\/india-growth-paradox","title":{"rendered":"India\u2019s Growth Paradox"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Despite India\u2019s rise as the world\u2019s fourth-largest economy with a nominal GDP of $3.9 trillion, concerns persist over the lack of inclusivity in economic growth.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Illusion of Growth<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>GDP vs. Per Capita Reality: <\/strong>Although India\u2019s GDP has expanded significantly, the average per capita income stands at just <strong>$2,800<\/strong> (\u20b92.33 lakh\/year), far below countries like<strong> Vietnam ($4,300) and China ($12,500).<\/strong><\/li>\n\n\n\n<li><strong>Extreme Wealth Concentration: <\/strong>The top 1% of Indians own over 40% of the nation\u2019s wealth. The top<strong> 5%<\/strong> control <strong>62%.<\/strong>\n<ul class=\"wp-block-list\">\n<li>If their wealth is excluded, the effective per capita income for the rest falls to <strong>\u20b95,600 per month<\/strong>, barely above subsistence level.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Global Comparisons:<\/strong> India ranks <strong>111th out of 125<\/strong> on the Global Hunger Index, and <strong>134th<\/strong> on the Human Development Index \u2014 lower than peers like Vietnam or Sri Lanka.\n<ul class=\"wp-block-list\">\n<li>80 crore people in India rely on free ration schemes under the NFSA. <strong>230 million<\/strong> Indians live in multidimensional poverty.<\/li>\n\n\n\n<li><strong>35%<\/strong> of Indian children are stunted, indicating chronic undernutrition.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Exchange Rate Distortion:<\/strong> India\u2019s GDP in dollar terms is nominal, and heavily influenced by exchange rates.\n<ul class=\"wp-block-list\">\n<li>A weakening rupee can shrink India\u2019s dollar-based economy without any real decline in domestic production.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Employment Crisis:<\/strong> Female Labour Force Participation Rate (LFPR) is among the lowest in the world. Youth unemployment, especially among graduates, remains alarmingly high.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reasons for wealth concentration<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Historical Factors:<\/strong> India\u2019s history, including colonization and feudalism, has led to the accumulation of wealth in the hands of certain groups.\n<ul class=\"wp-block-list\">\n<li>These historical inequalities have persisted over time, influencing wealth distribution patterns.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Economic policies,<\/strong> including liberalization and privatization measures implemented since the <strong>1990s,<\/strong> have spurred economic growth in certain sectors, benefitting those with access to capital and resources.<\/li>\n\n\n\n<li><strong>Urban-Rural Divide: <\/strong>Urban centers tend to attract more investment and offer better job opportunities, leading to the concentration of wealth in these regions.<\/li>\n\n\n\n<li><strong>Access to Education and Opportunities:<\/strong> Disparities in access to education persist, particularly among marginalized communities, exacerbating wealth inequality.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Shift to Human-Centric Metrics:<\/strong> Focus on Human Development Indicators (HDI), Nutrition, Education, and Gender Equality alongside GDP.<\/li>\n\n\n\n<li><strong>Focus on Labour-Intensive Sectors:<\/strong> Promote MSMEs, rural industries, and social infrastructure to create broad-based employment.<\/li>\n\n\n\n<li><strong>Decentralized Planning:<\/strong> Empower local bodies, cooperatives, and community-based governance.<\/li>\n\n\n\n<li><strong>Ecological Justice: <\/strong>Align growth with sustainability, climate action, and environmental protection.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Gini Index<\/strong><br>&#8211; The <a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/26-04-2025\/world-bank-india-poverty-drop\"><strong>Gini index<\/strong><\/a> is a<strong> measure of the distribution of income <\/strong>across a population.<br>&#8211; <strong>A higher Gini index<\/strong> indicates <strong>greater inequality<\/strong>, with high-income individuals receiving much larger percentages of the population\u2019s total income.<br>&#8211; <strong>Global inequality, as measured by the Gini index,<\/strong> has steadily increased over the past few centuries and spiked during the COVID-19 pandemic.<br><br><img loading=\"lazy\" decoding=\"async\" width=\"423\" height=\"294\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXcxHRxJqwkGixeiYmMdmlEpGTMtScsredIHs-MmEP2M992boc2xR4ErKzqZRik1xEFHS4hy155EYaXSUiCzFo_9f0LGmsyHXdRqUYDZm6nQD4Sxv2UYFVp2gdfIgchrPAqCOgA42g?key=pgm5Vtr39h-ST9hw99VO0w\" alt=\"Gini Index\"><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/opinion\/columns\/indias-gdp-fourth-largest-economy-illusion-10060646\/#:~:text=The%20top%201%20per%20cent,1.4%20billion%20people\" rel=\"nofollow noopener\" target=\"_blank\"><strong>IE<\/strong><\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background has-fixed-layout\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Read this in Hindi: <a href=\"https:\/\/www.nextias.com\/ca\/wp-admin\/post.php?post=45418&amp;action=edit\">\u092d\u093e\u0930\u0924 \u0915\u093e \u0935\u093f\u0915\u093e\u0938 \u0935\u093f\u0930\u094b\u0927\u093e\u092d\u093e\u0938<\/a><\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">Despite India\u2019s rise as the world\u2019s fourth-largest economy with a nominal GDP of $3.9 trillion, concerns persist over the lack of inclusivity in economic growth.<\/li>\n<p><\/p>\n<h3><strong>The Illusion of Growth<\/strong><\/h3>\n<li class=\"ms-5\">GDP vs. Per Capita Reality: Although India\u2019s GDP has expanded significantly, the average per capita income stands at just $2,800 (\u20b92.33 lakh\/year), far below countries like Vietnam ($4,300) and China ($12,500).<\/li>\n<li class=\"ms-5\">Extreme Wealth Concentration: The top 1% of Indians own over 40% of the nation\u2019s wealth. The top 5% control 62%.<\/li>\n<li class=\"ms-5\">If their wealth is excluded, the effective per capita income for the rest falls to \u20b95,600 per month, barely above subsistence level.<\/li>\n<li class=\"ms-5\">Global Comparisons: India ranks 111th out of 125 on the Global Hunger Index, and 134th on the Human Development Index \u2014 lower than peers like Vietnam or Sri Lanka.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/13-06-2025\/india-growth-paradox\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-45359","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/45359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=45359"}],"version-history":[{"count":8,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/45359\/revisions"}],"predecessor-version":[{"id":46299,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/45359\/revisions\/46299"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=45359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=45359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=45359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}