Bridging the Gap: Poverty, Inequality, and Inclusive Growth Challenge

Introduction: The Twin Faces of Growth

Mahatma Gandhi once said, “Poverty is the worst form of violence.” Poverty does not only shrink a nation’s economy or make life difficult by restricting access to food, shelter, clothing, education, and healthcare. It also quietly erodes a person’s dignity and sense of worth.

Today, India proudly presents itself as one of the world’s fastest-growing economies. And yes, the country has made remarkable progress in reducing poverty. According to reports, India lifted over 415 million people out of multidimensional poverty between 2005 and 2019. But despite this achievement, the benefits have reached only certain sections of society, while around 230 million people still struggle for basic needs.

For India, the real question is no longer about how fast our economy grows. Instead, it is about how fair, how inclusive, and how sustainable that growth truly is.

Historical Perspective: Legacy and Root Causes of Poverty

Before Independence

The British ruled over India for nearly two centuries. The entire structure of their policies, rules, and administration worked solely for the benefit of the British economy. They had no concern for the dignity, lifestyle, or values of the Indian people. Their sole objective was to extract as much wealth as possible from India. In order to achieve this, they often violated the very principles and laws they claimed to uphold. Their legislative approach was exploitative, and their executive approach was openly oppressive.

• Under British rule, more than 30 million people died between 1770 and 1943. The Great Bengal Famine of 1943 alone killed about 3 million people. This tragedy was the direct result of British wartime policies that imposed heavy taxes and levies to meet their own economic needs.
• The colonial administration neglected education and healthcare. By 1947, India’s literacy rate was only around 12 percent, and the health infrastructure was extremely limited.
• Harsh taxation and an unjust land revenue system crushed the rural economy. Many farmers were forced and even evicted from their own land because they were unable to meet exploitative tax demands and compulsory labor requirements.

After Independence

India finally became free from slavery and could create its own policies and systems to address the deep challenges left behind by colonial rule. In 1956–57, the poverty rate was nearly 65 percent based on Minhaj’s expenditure method. Even in 1993, the international poverty line of 2.15 dollars per day placed India’s poverty rate at 47.6 percent. After independence, the expected decline in poverty did not happen until the early 1990s. This slow progress was mainly due to the economic model we adopted, the License Raj system that restricted private enterprise, and an incomplete land reform process.

Post 1991: Seeding of Inequality

The reforms of 1991 became a turning point. On one side, India’s economy began to grow rapidly. On the other side, inequality started widening due to several reasons.

• The government focused heavily on the tertiary sector such as information technology, finance, telecommunications, trade, and foreign investment. The secondary sector also received some attention, but only moderately. In contrast, the primary sector was largely neglected, which created an uneven pattern of growth. According to the International Labor Organization, almost half of India’sworking-age population is still dependent on agriculture or related activities. The Economic Survey 2024–25 and PLFS data also show that about 45 to 46 percent of the workforce remains engaged in agriculture, even though the sector contributes circa 15 to 18 percent to the national GDP. This mismatch reflects deep structural imbalance.
• Public investment in health, education, and rural infrastructure remained insufficient. These foundational areas needed stronger investment to prevent inequality from growing in the long run.
• Policies increasingly favored the corporate sector. There was no wealth tax, bank bailouts protected large firms, and tax breaks often benefited big businesses. As a result, the rich continued to gain while many youths faced unemployment, low wages, or were pushed into informal work.

Some Facts and Data

According to the World Inequality Lab (2024):

1. The top 1 percent of Indians earn 22.6 percent of the national income and control nearly 40 percent of the country’s total wealth.
2. The bottom 50 percent earn only 13.4 percent of the income.
3. The top 10 percent hold 77 percent of India’s wealth, while the bottom half owns barely 3 percent.
4. India’s income Gini coefficient is around 0.50, one of the highest in Asia after South Africa and Brazil.
5. The national poverty rate is estimated to be around 4 to 4.5 percent according to the SBI analysis based on the HCES 2023–24 survey.

This surging inequality is not just a statistic. It reflects serious shortcomings in governance and policy execution, the system meant to protect the poor. It also goes against the spirit of Articles 14, 38, and 39(c) of the Constitution. Most importantly, it represents a continuing injustice toward the poor and underprivileged communities of India.

Premise Drivers of Inequality

Colonialism is not the only reason behind India’s poverty. Caste discrimination, gender inequality, social attitudes, and regional imbalances have also kept poverty alive like a chronic disease. In many places, including my own surroundings, this becomes very clear.

For example, in my village, several families from SC communities still live in poverty. Their condition is not always the result of administrative or political failures alone. Many of them remain stuck in a cycle where they do not try to move towards progress or long-term development. Whatever they earn through daily wage work is spent immediately, without thinking about the future or saving for their children. When such thinking becomes normal, poverty naturally continues from one generation to the next. So, the question arises: how can poverty disappear completely if such patterns or thinking still exist?

Regional imbalance also plays a major role. Resources and opportunities are not distributed evenly across India. Owing to this, poverty levels differ sharply from state to state. Some regions grow faster, while others remain underdeveloped, it often reflects political priorities and deliberate policy choices rather than coincidence.

Road Ahead: For Inclusive Growth

Smart Acts: Learn from Others

Most colonized countries once struggled with poverty just like India. South Korea and Singapore are clear examples. They also faced shortages, weak systems, and limited resources, yet they recovered far more quickly within a few decades. The reason is simple: they chose their strategies wisely. They focused on literacy, land redistribution reforms, strict governance rules, and strong export-oriented investments, especially in manufacturing and industry. Because of these decisions, they broke out of poverty within a short time, even though their early political systems were more authoritarian.

India should learn from other countries, understand their strengths, and adopt the ones that suit us best as the largest democratic nation. Success always leaves some clues behind in its journey. When we learn from others, accept our own mistakes, and move forward without complaints, we reach our goals faster and in a shorter time.

Investment in Human Capital

India needs to increase its spending on human capital. The current investment levels are still low, with education hovering around 2.5–3 percent of GDP and healthcare close to 2 percent. Compared to many other countries, this is far below what is required. These sectors are a panacea for long-term development and growth. Money invested here never goes to waste. The more we invest in people, the more prosperous, capable, and innovative our country will become.

Reduce Corruption

Corruption has become ubiquitous because it exists in almost every sector. It is the need of the hour to expunge it. According to the latest Transparency International report (CPI2024), India now ranks 96 out of 180 countries with a score of38 out of 100. This poor ranking is not good for India. Corruption acts like termites in the system; it threatens inclusive development and at the same time weakens the foundations, making ground fragile for violence, communal clashes, bribery, scandals like the 2G spectrum case, and issues such as misuse of electoral-funding mechanisms.

To overcome this challenge, India must take the following steps:

1. Ensure transparency in political funding.
2. Enforce anti-corruption laws strictly.
3. Raise social awareness and build stronger, independent institutions.
4. Promote a society rooted in values and principles.

Rejuvenate Agriculture and Rural Livelihood

The agriculture sector is still the backbone of the Indian economy because more than half of our population depends on it directly or indirectly. Its importance is undeniable. To strengthen this sector, the country needs a holistic and long-term approach.

• Land reforms must be done properly through modernization and digitalization, not just partially.
• Strengthen non-farm activities such as dairy farming, tourism, animal husbandry, fish rearing, handicrafts, MSMEs, and agro-tech based innovation and adaptation.
• Increase MSP support, raise the share of agricultural investment in GDP, provide incentives to marginal and small farmers, and reform labor laws wherever needed.
• Build strong infrastructure in rural areas and ensure they are well connected to urban regions.
• Promote drought resistant seeds, diversify crops, and introduce better farming methods.
• Set up climate resilient infrastructure to tackle floods, droughts, cyclones, and increase awareness in vulnerable regions.

Empower Women and Marginalized Communities

• Ensure equal access to education, infrastructure including digital tools, healthcare, credit, and meaningful political participation.
•  Strengthen and effectively implement major flagship schemes such as PMGKAY, MGNREGA, JDY, PDS, Ayushman Bharat, and others so that the benefits truly reach the ground level.
• Create more jobs and employment opportunities that support the upliftment of women and marginalized communities and help them become economically independent.

Wise Selection of Political Leaders

Politicians play a decisive role in shaping the future of any country. A good leader can take a nation from darkness to light, while the wrong one can drag it backward. This is why, as responsible Indian citizens, we must cast our votes wisely. Each vote carries the hope and well-being of millions.

While choosing the nation’s leaders, citizens should reflect on a few essential points because they determine the health of our democracy and the direction of our development:

1. The candidate’s educational background, upbringing, and past track record.
2. Their agenda such as policies, priorities, and long-term vision.
3. Whether he or she is courageous, compassionate, sincere, and visionary, working for the people rather than for power or personal gain.

Conclusion

As a matter of fact, it would be wrong to say that poverty is solely a legacy of colonialism. While colonial rule certainly contributed, both Indians and the British played a role. The imperial power laid some of the foundations of poverty by exploiting and crippling India’s economy. It is also true that India’s economy was largely stagnant at the time of independence. However, after 1947, India was free to shape its economy according to its own priorities and the demands of the time. Between 1947 and 1991, economic growth was slow. After liberalization, GDP growth jumped significantly, but at the same time, inequality began widening sharply, a trend that continues even today.

Despite these challenges, India has always tried its best to boost the economy within its capacity and knowledge, even with such a vast and diverse population. Naturally, running and managing such a country without ebbs and flows is difficult. Human beings make mistakes; they are not angels. Wisdom does not lie in never making mistakes, but in learning from them and standing up to move forward.

We can hope that India will achieve a $5 trillion economy and much more in the future. But what truly matters is that everyone gets to enjoy the fruits of that growth, not the wealthy or powerful. Only then can the real essence of inclusive development be fulfilled.