Confront ‘jobless growth’: let us focus on middle-class expansion

India must reverse widening income and wealth gaps for the sake of sustainable economic growth

- SAUMITRA BHADURI

India’s growth story over the last three and a half decades has been nothing short of transformative.

From a balance-of-payments crisis in 1991 to an economy on the cusp of the $5 trillion, India has undergone one of the most significant structural shifts among emerging markets. This brought visible gains in living standards, particularly for lower-income groups. Access to basic amenities has improved, financial inclusion has expanded through digital public infrastructure and welfare delivery is better targeted. These headline successes are important, but so is the sobering reality that India’s middle class, the backbone of its economy, may actually be shrinking.

Recently released distributional data for 2024 from World Inequality Lab shows how stark the divide is: India’s income Gini coefficient (0 being perfect equality) has risen from about 0.46 in 1990 to roughly 0.64 in 2024, while its wealth Gini has gone from around 0.65 to about 0.75. These scores represent a sharp structural widening of inequality, especially driven by increased wealth concentration.