Source: Global Times
Article from the Indian Express on May 27th, titled "What is the benefit of rapid GDP growth if it cannot bring a life with dignity?" According to IMF forecasts, by 2025, India's GDP will reach $4.19 trillion, surpassing Japan to become the fourth largest economy in the world. This number seems commendable, but the structural problems hidden behind it deserve careful consideration.
It is undeniable that India's economy has climbed from 10th place a decade ago to 5th place now, which is an achievement worth praising. However, if we detach it from the specific context and measure economic strength solely by the absolute value of GDP, it often leads to deception. A country's true strength does not merely lie in the size of its total economic output, but more importantly, in its ability to effectively convert wealth into benefits for all citizens.
Why have advantages not translated into benefits?
Why does India, despite its vast population and territory, fail to translate these into corresponding economic value? The fundamental reason lies in the long-term inefficiency within India's economic and institutional structures, over-reliance on low-value-added services, and the persistent failure to achieve large-scale industrialization and innovation breakthroughs.
According to IMF data, India's per capita GDP in 2025 will only be $2,800, ranking 140th globally, the lowest among BRICS countries. Although overall GDP is growing rapidly, wealth is extremely concentrated. A report in 2023 showed that the richest 1% of India's population owns more than 40% of the nation's wealth. If the top 5% of income earners are excluded, the remaining population's average income is only $1,130.
The increasing concentration of income and wealth makes it increasingly difficult for the bottom 50% of the population and the middle 40% group to keep pace with economic growth. This poses serious challenges to social cohesion, political stability, and long-term development. Relevant reports also indicate that the concentration of economic power in India has reached historical highs, with some large conglomerates dominating key sectors such as telecommunications, infrastructure, digital payments, and retail, raising concerns about monopolies, regulatory failure, and erosion of democratic mechanisms.
Some may say that inequality is a global issue, and other countries also face similar situations, but India's background is different. For example, the Chinese government possesses strong capabilities for public investment and redistribution; "redistribution" is also an important issue in Brazil's political environment. However, in India's current political and economic system, people lack sufficient willingness to confront and address wealth disparities.
Human Development Index severely lagging behind
In 2023, India's Human Development Index (HDI) score was only 0.685, ranking 130th globally, far below other BRICS countries. Other BRICS countries have not only achieved economic growth but have also increased investments in education, healthcare, and social security. This comparison also raises a fundamental question: if high-growing GDP fails to bring decent jobs, good healthcare, extended lifespans, higher literacy rates, and equitable basic services, then what is the significance of such growth?
India's regional disparities are equally significant. The HDI and per capita income levels in southern and western regions are generally higher, while large populations in central and eastern areas still face developmental lag. This regional imbalance also reflects the severe challenge of "inclusive growth"—not only crossing social strata but also bridging regional divides.
"Demographic dividend" at risk of becoming "demographic disaster"
As the most populous country in the world, India's median age is less than 30 years old, which should be a huge advantage. But if timely investments in education, skills training, and job creation are not made, this "dividend" could turn into a burden. According to the "Periodic Labour Force Survey" released in May 2025, India's labor force participation rate, especially for women, remains low. Every year, millions of young people enter the labor market, but the formal sector has not created enough job opportunities. If structural reforms are not carried out in education, labor regulations, and job creation, improving the disconnect between economic growth and the labor market, the so-called "demographic dividend" could ultimately turn into a "demographic disaster".
Currently, India needs to shift its focus from simply pursuing GDP numbers to concentrating on the real changes brought to its citizens by GDP. This means investing heavily in job creation, public healthcare, quality education, and robust social security systems; it also means that credit resources should flow not only to unicorn companies but also cover small and medium-sized enterprises. Achieving all this requires courage: the courage to reform institutions, the courage to reshape development priorities, and the courage to resist the temptation of "headline economics". (Author: Ayub, translated by Judy)
Original article: https://www.toutiao.com/article/7510008823122330149/
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