With a projected 6.5 percent growth rate for FY 2024, India continues to be the fastest-growing economy in the world. But what does this growth mean, and are its benefits distributed equitably among citizens in terms of education, income, and employment?

In India, the top 10 percent of the population accounts for 57.1 percent of the income while the bottom 50 percent accounts for just 13.1 percent. In practice, if one earns INR 60,000 per month per adult in a household, they belong to the top 10 percent of the population in terms of income.

India’s unequal distribution of income is due to several factors such as insufficient social spending on education, low female labour force participation, and inability of the service and industrial sectors to produce employment opportunities.

A big contributor, however, is the lack of opportunity for several millions of Indians who are educated but not employed in the formal economy. The State of Working India 2019 report estimated that the number of educated citizens looking for a job was nearly as many as the entire population of Bengaluru. In June 2022, the Lok Sabha’s Department of Personnel and Training (DoPT) revealed that over the past eight years, a mere 7.22 lakh aspirants—out of more than 22 crore applicants—got permanent central government jobs. This means each job had more than 300 applicants.

This dearth of relevant education and opportunity are fundamental reasons behind the increasing income inequality in India. The problem we therefore need to solve for is, how can the country grow more equally and how can opportunities be made less scarce?

Read the full article about unemployment in India by Aditya Natraj, Mekin Maheshwari, and Priya Agrawal at India Development Review.