8% Indians Hijack Growth, 8 Crores Live in Poverty
By T Muralidharan
Pune, November 12, 2024 - In a revealing analysis of India's economic landscape, a report by Blume Ventures reveals stark disparities within the country. While India boasts a growing economy and a thriving middle class, a staggering 1 billion people struggle to make ends meet.
The report highlights a peculiar phenomenon where only 8% of Indians, amounting to about 64 crores people, drive the consumer market forward. The remaining 71% of the population, numbering around 700 crores individuals, ekes out a meager existence on the margins of the economy.
Consequently, India's Gross Domestic Product (GDP) growth rate of 6% for FY24 is more reflective of the efforts of this privileged elite rather than the struggling majority. The GDP of $3.7 trillion effectively masks the poverty and inequality that persist within Indian society.
The consumption patterns of Indians are similarly skewed, with only 120 million people spending over $15,000 per year - a figure characteristic of countries like Mexico or Chile. In contrast, hundreds of millions struggle to afford basic necessities, including food.
"Indians are the largest migrant community in the world," notes the report, "with an elite white collar class seeking opportunities abroad and millions relying on remittances from Gulf countries to survive."
The poverty crisis also translates into a pressing issue of tax collection. Only 74 million Indians out of 1400 crores people file tax returns, with only 4.5 million individuals paying significant income taxes.
In an era where technology is transforming the workforce and AI threatens employment, it has become imperative for policymakers to address these pressing issues. "We must invest in growth that benefits all segments of society," says T Muralidharan, author and independent journalist, highlighting the need for sustained economic prosperity.
The Blume Ventures report warns against exacerbating debt spirals among poor borrowers and calls for increased investment in direct benefit transfer schemes to improve the lives of the marginalized. As India's GDP continues to grow, it is crucial that policymakers prioritize ensuring equitable economic growth and meaningful tax collection, ensuring a better future for all Indians.