There has been considerable noise in the media and government circles about India surpassing Japan to become the world’s fourth-largest economy in terms of GDP. While this sounds impressive, it hides the real story. GDP only measures the total size of the economy and does not tell us how well the average Indian is living. In fact, when we look at income per person, India ranks very low, 144th globally, below countries like Vietnam and Sri Lanka. Poor wages, job insecurity, and unpaid labour remain widespread. The government’s focus on total GDP, while ignoring these deeper issues, gives a false picture of progress.
Much of India’s recent growth also comes from changes in how GDP is calculated, and from bouncing back after the COVID-19 crash. The revised method, introduced in 2015, made current numbers look better and past figures look weaker. This helped boost the government’s image, especially after policies like demonetisation and the hasty rollout of GST, which badly hit the informal sector. Even though official numbers showed growth, unemployment hit a 45-year high. Experts have warned that these numbers are not matching the actual ground reality. While India may be growing in size, its wealth is not being shared fairly. The richest 1% now earn over 22% of the national income, while the poorest 50% get only 13%.
To truly progress, India needs to shift focus from flashy numbers to real development. This means investing more in education, healthcare, and secure jobs. Over 90% of India’s workers are in informal jobs without proper protection. Building a skilled, healthy workforce and strengthening industries beyond just services can bring long-term benefits. But this also requires a strong democracy where people’s voices are heard, and decisions are made through institutions, not just by a few leaders. Without addressing these deep problems, India’s growth story will remain one of numbers, not of real change for its people.
-Team CFA
