The IMF projection of India’s nominal GDP for 2025-26 of $4,187.017 billion, against Japan’s $4,186.431 billion, ($586 million or Rs.5,011 crore more), is going to make India the fourth largest economy in the world, pushing Japan to fifth position. The three countries ahead of India are the US ($30.5 trillion), China ($19.2 trillion), and Germany ($4.74 trillion).
Despite the nuanced objections, such as ‘the figures are only projections and subject to revisions,’ it made Indians feel proud to hear B.V.R. Subrahmanyam, the CEO of NITI Aayog, when he talked of this achievement. He was right, prima facie, since the projections were those of an important international agency; there was every reason for jubilation all around. Further expectations are that India will ascend to third place with a 5.5 trillion-dollar economy in 2028, overtaking Germany.
Unfortunately, we are happy with these projected places while the right place of India should be number one, not third or fourth, simply because it has the largest population in the world; our share in wealth and income should be about 18 per cent of the world, commensurate with our population share. Now it is time to come out of the euphoria the projections generated and to look at the facts dispassionately; after all, the honest admission of truth is an essential prerequisite for designing a path to achieve our rightful place. What we need to gauge is threefold:
i) whether the growth numbers were correct;
ii) if correct, was there sufficient growth to gloat over so intensely? And iii) if sufficient, was the growth alone sufficient to achieve social justice? Also, we need to ask ourselves how well the lives of the masses were improving while the economy was scaling from height to height, as claimed. First, let us size up how big the achievement was in comparison to Japan, the country India is said to have surpassed.
Japan’s population is about 12 crore against India’s 146 crore, both countries have similar GDP volumes ~ $ 4.1 trillion each. Imagine the respective GDPs are equ – ally distributed among all the people of these countries. What they get per capita is: $2,878 equivalent in India and 11.79 times that sum, $33,955, in Japan. At this rate, Japan’s GDP would be around $50 trillion if it had India’s population. So, India’s GDP is too small compared to Japan. Similar astonishingly puny figures come out when compared with the other three high-ranked countries: the US ($89,105 per capita GDP), China ($13,687), and Germany ($55,911).
Germany, the country anticipated to lag be – hind India in GDP, has a per capita income 19.2 times more than that of India since its population is 8.3 crore, 17.59 times less than India. India’s economy when viewed in proportion to the number of persons living in the country is nowhere near any of the countries ranking above it. But natural justice warrants that it should be above every other country on earth. It can’t be said that it is normal or natural not to be ambitious because its place has been very low for decades. China which has now achieved a GDP level close to the high-income group was just equal to India in ter – ms of GDP and per capita GDPs during the 1990s as some economists concerned with poor growth point out. Now India’s rank in per capita income is 141 out of 195 countries, against China’s 70th rank.
Yet, India’s growth has increased remarkably when compared to its own position in the 1990s. As we have just seen, its GDP rank improved to 4 from 141 and the country is heading towards achieving 3rd rank, and the country’s GDP has doubled in ten years from $2.1 trillion to $ 4.1 trillion. But the beneficiaries of this limited (or impressive growth to some) are mostly the rich and super-rich, not the masses of people, as facts on the ground glaringly indicate. At one level, the population of billionaires and millionaires has been on the rise. The total number of billionaires in India by 2024 was 271, (increased from 1 in 1991; 7 in 2019, and 162 in 2022). In 2023 alone, 94 new billionaires were added, the highest number after the US, as per Hurun Research Institute’s 2024 global rich list. Their collective wealth was $1 trillion, equal to 7 per cent of the world’s total wealth. Similarly, the number of high-net-worth individuals, those having assets of more than $10 million, in India rose by 6 per cent last year to 85,698 as per Knight Frank’s wealth report 2025.
The number is expected to rise to 93,753 by 2028. Are we eventually heading to a plutocracy as some economists fear? At another level, unemployment has been increasing and the quality of employment has been decreasing over the years. The rich-poor divide is deeper than it was during British time; in 1947, the top 1 per cent held around 20 to 21 per cent of the country’s national income agai – nst 22.6 per cent now, as per a World Inequality Lab report. According to the World Inequ – ality Report 2022, the top 1 per cent of India’s population holds more than 40 per cent of the nation’s wealth, while the bottom 50 per cent own just 3 per cent. In terms of income, the top 10 per cent earn over 57 per cent of the national income.
While corporate profits increased by 22.3 per cent ~ a 15-year high ~ real wages declined between 2017-18 and 2023-24 as per the 2024 economic survey. Economic growth did not generate commensurate employment. While employment grew by 1.6 per cent between 2000 and 2012 against the increase in Gross Value Added of 6.2 per cent it increased only by 0.01 per cent when GVA increased by 6.7 per cent during the 2012-19 period as per ILO-IHD’s India Employment Report 2024. Youth and educated unemployment are at a deplorable level. In 2022, the unemployment rate among youths with a secondary or higher level of education was 18.4 per cent and that of graduates was 29.1 per cent. Another worrisome fact is that the employment growth was of poor quality; more than 90 per cent of the workforce is informally employed. Needless to add our health care and education sectors are moving from a bad to worse situation.
Ordinary Indians are not able to access the health care they need; 63 million of them are pushed into poverty because of healthcare costs every year ~ almost two people every second, according to an Oxfam report. There are several other pathetic situations which glare in our face and say that the growth, to whatever extent it has been, has not been helping the poor, meeting Mahatma Gandhi’s talisman to look into the face of the weak and meek and decide. The Oxfam report says, adding to its observation on income inequality, that it would take 941 years for a minimum wage worker in rural India to earn what the top-paid executive at a leading Indian garment company earns in a year. Those who demand economic development (of all), not just the growth (of a few) question why there was a need to supply free food grains to 81.35 crore poor under the Garib Kalyan Anna Yojana, if poverty has drastically come down in tandem with growth in India? Why did 25.68 rural people register (in 2023-24) themselves for a minimum wage job under MGNREGA if poverty is not widespread?
All this suggests that the growth has not been enough compared to India’s size and the growth was not enough to ensure the welfare of the people. What we need is growth with social justice, growth entailing mass production, growth for the masses, and growth involving the masses, providing quality employment to them. This needs a commitment. This needs an appropriate strategy. This needs appropriate planning ~ short-term, medium-term, and long-term planning with well-defined goals and means, which means a government that accepts these responsibilities, not one that delegates powers to market forces.
( The writer is a development economist and commentator on economic and social affairs )