Prime Minister Narendra Modi’s ascension to power in 2014, bolstered by a resounding mandate, was underpinned by the seductive slogan of “minimum government, maximum governance.”
This catchphrase, reminiscent of neoliberal economics, promised a streamlined state apparatus facilitating unfettered market forces. However, a deeper examination reveals a stark paradox between rhetoric and reality.
The Chimera of Economic Prosperity
India’s aspirations of becoming a $5 trillion economy and securing its position as the world’s 5th largest in terms of nominal GDP and purchasing power parity have been loudly trumpeted.
Yet, this macroeconomic narrative obfuscates a more nuanced and troubling reality.
The pertinent question emerges: cui bono? Who truly benefits from India’s vaunted growth story?
Deconstructing the Growth Narrative
The government’s modus operandi belies its “minimum government” mantra. Rather than embracing a laissez-faire approach, the state has become increasingly interventionist in sociocultural spheres. This ideological inconsistency manifests in India’s dismal performance across various global indices:
- Media Freedom Index: 161st
- Human Freedom Index: 119th
- Gender Gap Index: 129th
- Child Rights Index: 113th
- Human Development Index: 132nd
- Global Hunger Index: 111th
- Global Peace Index: 126th
- World Happiness Index: 126th
These rankings paint a grim picture of a nation grappling with fundamental issues of freedom, equality, and human development.
The Mirage of Trickle-Down Economics
India’s economic growth trajectory exhibits a glaring disconnect between aggregate economic indicators and holistic socio-economic development. The surge in per capita income from $442 to $2,389 over two decades, while impressive on paper, masks a deeply entrenched system of economic stratification.
The UNDP reports underscore a disconcerting trend: the fruits of economic growth have been disproportionately harvested by the affluent, exacerbating the already yawning wealth chasm. This phenomenon can be understood through the lens of the economist’s term “enclave development”—isolated pockets of prosperity amid vast swathes of deprivation.
The spatial dimension of India’s uneven development is equally alarming. Economically disadvantaged states, home to 42% of the population, account for a disproportionate 62% of those subsisting below the poverty line. This regional imbalance perpetuates a vicious cycle of underdevelopment, creating what development economists refer to as “poverty traps”—’self-reinforcing’ mechanisms that cause poverty to persist.
The Gini Coefficient Conundrum
The widening income and wealth disparities are starkly illustrated by India’s worsening Gini coefficient, a statistical measure of economic inequality. The top decile of earners commanding 57% of the national income, with the top percentile alone claiming a 22% share, places India among the world’s most unequal societies.
This level of income concentration is reminiscent of what French economist Thomas Piketty terms “patrimonial capitalism,” a system where inherited wealth plays a dominant role in shaping economic outcomes.
The concentration of wealth is even more pronounced, with the richest 10% owning over 65% of the nation’s total wealth. This extreme accumulation of capital in the hands of a few raises concerns about the emergence of a de facto plutocracy—a system of governance where wealth significantly influences political power.
India’s growth story, therefore, presents a paradox: robust GDP growth coexists with widening inequality. This phenomenon aligns with what development economist Amartya Sen describes as “growth without development”—a situation where macroeconomic indicators improve without a corresponding enhancement in human capabilities and freedoms.
As India navigates its complex development trajectory, it becomes imperative to critically reassess the current growth model.
The promise of “minimum government, maximum governance” rings hollow in the face of mounting evidence of state overreach and economic exclusion.