Time for Change: Building an Economy That Uplifts the Underprivileged

India, the world's fastest-growing economy, is poised to become the third-largest economy by 2027. Our nation is admired for its rich civilizational heritage and stands as the world's largest democracy with a population of 1.4 billion. India is also recognized for its impressive 8% GDP growth. Amidst a widespread economic slowdown in advanced economies, India has emerged as a prime destination for global investors, driven by high public spending, robust urban demand, a youthful workforce, a digital revolution, rapidly expanding infrastructure, a thriving capital goods sector, and a stable rupee. Additionally, the influence of over 30 Indian-origin CEOs leading major multinational companies around the globe further enhances India's global standing. These factors, combined with its strategic geographic position, have elevated India to the status of an emerging superpower with unparalleled influence. This is an opportune moment not only to aspire for global leadership but also to achieve our constitutional goals of eradicating poverty and ensuring social, economic, and political equality for all.

However, India still faces significant challenges as millions of its people remain trapped in poverty and illiteracy. The wealth gap between the rich and the poor continues to widen, making it the most unequal country globally. Over 250 million people survive on less than $2 a day, and India is home to a quarter of the world's undernourished population, with 350 million citizens still malnourished. Illiteracy remains a pressing issue, with India scoring just 28.7 out of 100 on the 2023 Global Health Index. The disparity is stark: while 271 billionaires flourish, the top 10% of the population controls 57% of the national income, leaving the bottom 50% with a mere 13%. Despite the economic boom, the poor are increasingly being pushed into deeper poverty as social justice has been sidelined in favor of economic efficiency.

The top 10% enjoy unparalleled luxury, including elite education, top-tier healthcare, and gated mansions, while their relentless drive to accumulate wealth powers the economy. Yet, the government has overlooked the fact that the other 50% or more are barely surviving due to skewed economic policies. Unlike slavery or apartheid, poverty in India is not an inevitability. The country cannot afford this imbalance—where a wealthy minority thrives while the vast majority remains hungry, uneducated, and deprived—without courting disaster.

While many other nations also experience a growing wealth gap, India's situation is particularly severe because a small group of individuals has amassed and controls more wealth than the bottom 50% of the population. This concentration of wealth is the direct result of the neoliberal economic policies that successive governments have pursued over the past several decades. These policies promised rapid economic growth and claimed that the "trickle-down" effect would miraculously lift everyone out of poverty, providing enough economic strength for all to live decent, dignified lives. Unfortunately, this promise has not been fulfilled.

Despite the promises of the neo-liberal economic agenda, the expected benefits did not materialize. Instead, these policies enabled the unchecked accumulation of wealth by a select few, to the detriment of millions of underprivileged citizens. This lopsided economic system has resulted in more than 90 % of our healthcare system being controlled by private entities, placing quality healthcare out of reach for over 800 million people. The state-funded healthcare sector, meant to serve the poor and disadvantaged, has been severely undermined by these policies, with devastating consequences for those it was intended to help.

The education sector tells a similar story. A ₹58,000 crore coaching industry has thrived in India, born out of flawed government policies and the failure to provide affordable, quality education. A stark example of this crisis is seen in 2024, when 2.4 million students competed for just 100,000 MBBS seats. Today, most providers in the education and health sectors have amassed significant wealth and are deeply entrenched in these critical areas, making it increasingly difficult to break their hold.

It is not that the private sector has no role in critical areas like healthcare and education; rather, the government must significantly increase its spending to ensure that publicly funded hospitals, schools, and colleges can offer high-quality services to those who cannot afford the exorbitant costs of private healthcare and education. For over 15 years, India has faced underemployment, leading to widespread desperation for jobs, which has fuelled issues like paper leaks and corruption in securing administrative positions.

India is also grappling with massive unemployment, particularly among its youth—about 65% of the population is under the age of 35, yet only 2% are skilled, and half of the graduates are unemployable. This unemployment crisis is a direct consequence of current economic policies, which appear to be designed to benefit industrialists and businesses, generating substantial profits for a few stakeholders while neglecting the needs of over a billion ordinary citizens whose only real power lies in their "one vote."

The crucial question is why such economic policies were adopted and allowed to prevail in a democracy like ours. Democracy, as the most ideal form of government, is designed to give voice to every citizen, enabling them to participate in shaping a government that safeguards their welfare. Should a democratically elected government prioritize only the interests of the wealthy elite, or should it be guided by the goal of uplifting more than a billion ordinary citizens? The data within our country paints a picture that starkly contrasts with the justifications given for current economic policies, such as reducing corporate and income taxes. These free-market policies have been touted as a cure-all for our nation's problems, but the reality is quite the opposite.

India boasts a young population, with over 400 million people of working age who are still waiting in frustration to be included in the growth narrative. Despite having millions of eager young citizens ready to contribute, it is disheartening that we are still competing with countries like Germany, Japan, and the UK—nations whose populations are only a fraction of ours. Expecting the private sector to create jobs for millions of people is as futile as believing that the trickle-down effect will eradicate poverty. Even after seventy-seven years of independence, we remain near the bottom of the global rankings for per capita income, a troubling reality that demands a reset of our economic policies.

Inequality of opportunity and access to healthcare and education continue to elude millions of our people. While booming stock markets and luxurious malls dominate the urban landscape, over 800 million people still rely on free food grains and other basic necessities—a glaring paradox that must be urgently addressed. Today, India stands as one of the most unequal countries in the world. The widening gap between the haves and the have-nots has reached a dangerous level, threatening to destabilize our society with potentially grave consequences, as evidenced by events unfolding in neighbouring countries.

The current situation demands immediate change, starting with a fundamental shift in our economic policy. The models of "Reaganomics" and "Thatcherism" have proven ineffective. The government must reconsider the neo-liberal economic framework and implement a model of welfare economics. It is essential to explore an alternative approach to economic development. While liberalization measures have spurred economic growth, they have also exacerbated inequalities. We need to establish an economic system that prioritizes the welfare of those at the bottom of the pyramid—the poor—ensuring they are included in our nation's remarkable economic progress. True development must uplift the lives of the underprivileged. Only then can India achieve its potential as the world's greatest democratic superpower.

(Vijay Shankar Pandey is a former Secretary, Government of India)