The top 1% of Indians own 40.1% of the nation's wealth, higher than the 37% global average. This makes India one of the world's most unequal countries, according to the World Inequality Report. By contrast, the top 1% own 24% of the country's wealth in Pakistan, and 23.9% in Bangladesh. Tiny groups of wealthy elites (top 1%) are using their money to buy mass media to manipulate public opinion for their own benefit. They are paying politicians for highly favorable laws and policies to further consolidate their power. It is a phenomenon known as "elite capture".
 |
| Wealth Inequality. Source: World Inequality Report 2026 |
"Extreme wealth inequality is persistent and increasing" in all parts of the world, says the report published by World Inequality Lab of the Paris School of Economics. This has serious economic, political and social implications. It is undermining democracies and empowering billionaires at the expense of the common people, including the middle class (middle 40%) and the poor (bottom 50%).
 |
| Income Inequality. Source: World Inequality Report 2026 |
Income inequality is trending in the same way as wealth inequality. The income of the top 1% of Indians stands at 22.6% of the national income. The income of the top 1% of Pakistanis is 16.2% of the country's income, significantly lower than the 20% global average. The income and wealth distribution in Bangladesh is similar to Pakistan's.
 |
| Widening Income Gap in India. Source: WIR2026 |
 |
| Persistent Income Gap in Pakistan. Source: WIR2026 |
The global average monthly income is 1200 Euros but there are huge differences among various regions of the world. The South and South East Asia region remains among the poorest, but its average monthly income of 600 Euros is twice that of sub-Saharan Africa. North America's monthly income of 3,800 Euros is the highest while sub-Saharan Africa's 300 Euros is the lowest in the world.
 |
| Regional Income Disparities. Source: WIR2026 |
 |
| Global Inequality Change From 1980 to 2025. Source: Bloomberg |
The report documents how the global financial system reinforces inequality. Wealthy economies continue to benefit from an “exorbitant privilege”: each year, around 1% of global GDP (approximately three times as much as development aid) flows from poorer to richer nations through net foreign income transfers associated with persistent excess yields and lower interest payments on rich-country liabilities. Reversing this dynamic is central to any credible strategy for global equity.
Related Links:
Haq's Musings
South Asia Investor Review
India Muslims: The Poorest Group in Modi's Hindu Rashtra
Food in Pakistan 2nd Cheapest in the World
India in Crisis: Unemployment and Hunger Persist After COVID
Record Number of Indians Seeking Asylum in US
Ambani Wedding, Indian Billionaires and Bollywood
Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts
Pakistanis Consuming More Calories, Fruits & Vegetables Per Capita
How Grim is Pakistan's Social Sector Progress?
Pakistan Fares Marginally Better Than India On Disease Burdens
COVID Lockdown Decimates India's Middle Class
Pakistan Child Health Indicators
Pakistan's Balance of Payments Crisis
How Has India Built Large Forex Reserves Despite Perennial Trade Deficits
Riaz Haq's Youtube Channel
I don’t think or I don’t know if Hindu faith has any commandments about rights of the poor, obligations of the rich as we have in Islam. Not saying Muslims are following those commandments.
ReplyDeleteIndia’s caste ridden society is inherently unequal. The economic inequality is the lowest among Indian Muslims, far lower than among various Hindu castes. Average MPCE for lower caste Muslims is Rs. 2,164 while it is Rs. 2,180 for upper caste Muslims (Ashrafs). Inequality among Hindu castes is the highest. Lower caste Hindus average MPCE is only Rs. 2,095, far lower than Rs. 3,321 for upper caste Hindus.
ReplyDeletehttp://www.riazhaq.com/2024/01/indian-muslims-poorest-group-in-modis.html
A religion that is based on such a cast system, inherent inequality in human value, cannot promote equalization even as an ideal!
ReplyDeleteThe Untouchables are forever meant to be lowly, subservient and Brahmins are always masters. That is the way Bhagwan created this universe.
While not discounting the role of caste and religion in the income and wealth disparities in India, I think that the greater disparities seen in statistics here in comparison to Pakistan and Bangladesh probably has got more to do with the relatively larger concentration of wealthy upper class in the country including industrial families, movie stars (not just from Bollywood but also from other Indian-language film industries), influential political families etc.
ReplyDeleteFor instance, the estimated combined wealth of Mukesh Ambani ($108 billion in 2025) and Gautam Adani ($64 billion in 2025) alone is on a scale that is nearly half the total GDP of Pakistan! To quote another example, as per 2025 Forbes list as well as 2025 Hurun Global Rich list, India was ranked 3rd behind US and China for the number of billionaires with estimates ranging between 205 (Forbes) and 284 (Hurun). This is again much greater than the estimated numbers for Pakistan (15) and Bangladesh (0). India also recorded some 868,660 millionaires as well as per 2024 count, though I couldn't find the numbers for Pakistan and Bangladesh.
https://en.wikipedia.org/wiki/List_of_countries_by_number_of_billionaires
https://en.wikipedia.org/wiki/List_of_countries_by_number_of_millionaires
Obviously, having such disproportionate concentration of wealth among a few individuals and families in a relatively lower income country like India would heavily skew the income and wealth distribution even without factors like caste or religion coming into play.
While Brofessor sb has rightly pointed out that India has higher inequality than Pakistan, he has cleverly omitted some other factoids. The bottom 50% of Indian population has an average PPP income of 940 Euros and average wealth of 1801 Euros. By contrast, the bottom Pakistan has an average PPP income of 816 Euros and wealth of 736. In short, the poorest Indians are better off than the poorest Pakistanis. Hopefully Brofessor sb will admit that Pakistan has failed economically. Regards
ReplyDeleteAnon: "In short, the poorest Indians are better off than the poorest Pakistanis. Hopefully Brofessor sb will admit that Pakistan has failed economically"
ReplyDeleteIt is now widely understood that India's official GDP is highly exaggerated. IMF has questioned it and Indian economists like Prof Arun Kumar have said India's actual GDP is as low as 50% of the official GDP, mainly because of the way the rapidly declining unorganized sector is overestimated by Indian officials.
https://www.riazhaq.com/2025/11/imf-questions-modis-gdp-data-is-indias.html
On the other hand, Pakistan's unorganized GDP is significantly underestimated. It can be seen in the size of Pakistan's cash economy (currency in circulation) which is much larger as a percentage of the total economy than in India and Bangladesh.
https://propakistani.pk/2025/10/10/pakistans-real-economy-is-near-1-trillion-says-finance-minister-aurangzeb/
“Pakistan’s recorded economy stands at US$411 billion, but nearly half remains undocumented,” the (finance) minister (Aurngzeb) said. “The real size of our economy is closer to a trillion dollars.
https://www.riazhaq.com/2021/12/has-bangladesh-really-left-india-and.html
"Pakistan’s currency in circulation reaches Rs10.8 trillion ($38.5 billion) , up 27.4% of total money supply"
https://profit.pakistantoday.com.pk/2025/08/28/pakistans-currency-in-circulation-reaches-rs10-8-trillion-up-27-4-of-total-money-supply/
Countries with most cash use in world in 2025: Pakistan in top 10; know where India ranks
ReplyDeleteList of top 10 countries with most cash usage in 2025: At the top of the list is Myanmar, where cash is used for about 98 per cent of everyday transactions.
https://indianexpress.com/article/trending/top-10-listing/countries-with-most-cash-use-in-world-in-2025-10361431/
With around 90 per cent of everyday transactions being performed in cash, Pakistan is likewise at the top of the list. Here, the sizable informal economy is crucial. Cash is preferred by many daily wage workers and small business owners, in part to avoid complex banking procedures and occasionally to avoid paying taxes.
How much Cash do Indians use in 2025?
Approximately 70 per cent of all transactions in India involve cash, despite the country not ranking among the top 10. However, India is notable for spearheading the revolution in digital payments. With just a smartphone, millions of individuals may now send and receive money without using cash thanks to the government-backed Unified Payments Interface (UPI). UPI has made digital transactions quick, simple, and accessible for both online and street merchants.
Lets consider the statements of Prof. Arun Kumar and Muhammad Aurangazeb and see if it makes sense.
ReplyDeleteProf. Arun Kumar's estimate of the "real" size of the Indian economy is $2.5 trillion. I do not know what would be estimate of the "real" size of Pakistan's economy as per the statement of Aurangazeb, but since he says it is "closer to a trillion dollars", lets assume a figure of $700 million. That would make the Indian economy only around 3.5 times larger than Pakistan's eventhough its population is 6 times larger. Lets also consider then that this means the effective per capita income of Pakistan is significantly higher than India's. But are these assertions backed by other statistics?
Take for example the sales of cars. We know the purchase of a new car would be the dream of every middle-class Pakistani and Indian. What do the sales of cars in both countries suggest?
For FY2025,
Car sales in India - 1,353,000
Car sales in Pakistan - 112,203
https://www.siam.in/statistics.aspx?mpgid=8&pgidtrail=9
"Total Passenger Vehicle sales rose to 43.02 lakh units in FY 2024-25 from 42.19 lakh units in FY 2023- 24. Specifically, Utility Vehicle sales increased from 25.21 lakh units to 27.97 lakh units in FY 2024-25, and sales of Vans grew from 1.49 lakh units to 1.51 lakh units. However, Passenger Car sales declined from 15.49 lakh units to 13.53 lakh units in FY 2024-25."
https://www.google.com/amp/s/www.dawn.com/news/amp/1923376
"According to data released by the Pakistan Automotive Manufacturers Association, car sales rose by 38pc to 112,203 units in FY25 from 81,579 units a year earlier."
These numbers would put the car sales in India at 12 times as that of Pakistan.
Could it be that the cheapest Pakistani car is pricier than the cheapest Indian car? Doesn't seem so with these prices.
Maruti Suzuki Alto K10 (pre-GST 2.0) - 500,000 INR (USD 5,882)
United Bravo - PKR 1,500,000 (USD 5,344)
Besides, the sales of Alto and other budget hatches in India have seen a steep decline in recent years and SUVs and XUVs have begun to dominate.
https://www.google.com/amp/s/www.news18.com/amp/auto/suv-sales-hit-2-79-million-units-in-fy25-small-cars-hit-15-year-low-9300728.html
Note: Some caveats here though. I'm aware that Pakistan also has a large imported used car market (which is practically non-existant in India due to very high import duties) and I do not know if those sales are reflected in Pakistan's numbers. If they are not, and assuming used car imports constitute 20% of Pakistan's car sales (as mentioned in the Pakistani news report below) and the count of 112, 203 above reflect the other 80% of sales, the total car sales in Pakistan would rise to around 140,000. This would still make India's car sales 9-10 times that of Pakistan.
"Pakistan’s auto industry in peril: Used car imports jump to 20pc from 7.5pc in 2020-23: EDB"
https://www.google.com/amp/s/www.brecorder.com/news/amp/40387471
Also, I'm aware that Pakistan govt had imposed restrictions on import of CKD kits for a period due to low forex reserves before it signed up for the IMF programme. I'm not sure to what extent that has impacted Pakistan's sales numbers here.
Vineeth: "Take for example the sales of cars. We know the purchase of a new car would be the dream of every middle-class Pakistani and Indian. What do the sales of cars in both countries suggest?"
ReplyDeleteThe world's biggest car market is China. But is it the world's largest economy?
Besides, both India and Pakistan are among the least motorized countries in the world. Only 7-8% of Indian households own cars. The figure for Pakistan is 6-7%.
ReplyDeleteSushant Singh
@SushantSin
If the GDP is rising by so much, why is tax collection not rising at even half that rate?
https://x.com/SushantSin/status/2001125318543949997?s=20
Cars owned per 1000 by Country 2025: US 850, Japan 670, Germany 627, China 231, Egypt 70, Pakistan 69, India 57
ReplyDelete
https://worldpopulationreview.com/country-rankings/cars-by-country
Riaz Sb., not sure about your source but as per UN stats (as reported in Wikipedia). Pakistan car ownership is: 121/1000
Deletehttps://en.wikipedia.org/wiki/List_of_countries_and_territories_by_motor_vehicles_per_capita?wprov=sfla1
Zamir
@G Ali/Zamir,
DeleteIf you check the source for Pakistan's number in that Wiki page, the count of "121" includes both two-wheelers as well as cars (3 crore combined). If you take cars alone (70 lakh), the number of cars per 1000 people in Pakistan would come to "28". India's number of "38" in the same table refers only to cars and do not include motorcycles ("34" in the original source article).
https://profit.pakistantoday.com.pk/2023/08/01/secp-finds-only-2-77-of-total-registered-vehicles-in-pakistan-are-insured/
"The report categorises the 3 crore registered vehicles into 2.3 crore motorcycles and 70 lakh motor cars".
https://www.dataforindia.com/vehicle-ownership/
"There are around 260 million two-wheelers and 50 million cars on Indian roads. Relative to the country's population, there are 185 two-wheelers and 34 cars for every 1000 people in the country."
- "The world's biggest car market is China. But is it the world's largest economy?"
ReplyDeleteSales of cars in a country also depend on the affordability of car prices for its people, taxes etc. It also depends on the state of development of the public transport infrastructure and govt policies that may encourage or discourage private car ownership. India and Pakistan are a closer comparison here on these respects.
- "Cars owned per 1000 by Country 2025: US 850, Japan 670, Germany 627, China 231, Egypt 70, Pakistan 69, India 57"
Perhaps you didn't notice the fine print below that list. It says "The category ‘cars’ includes automobiles, pickup trucks, SUVs, vans, buses, and freight and other commercial trucks, but excludes two-wheelers."
So, the numbers there are clearly not just passenger car ownership, but includes commercial vehicles like buses, trucks etc as well. India has a much more developed rail transport infrastructure than Pakistan in terms of track length, the number of cities that are connected, the number of passenger and freight trains that run daily, the number of passengers that are carried etc. Its urban transport infrastructure including suburban rail and metro systems are far better developed than Pakistan too. So, its possible India has fewer commercial vehicles like trucks and buses per population than Pakistan does.
If you Google for "Cars per 1000 people" for India and Pakistan you get widely varying numbers depending on the source. Some sources say it is 30-38 for India and 15-20 for Pakistan. There is uncertainity over what the source for these numbers are or how they are calculated. Are these cars that are in active use? Does it include older cars that are no longer in use and have been disposed off?
For instance, this source below says that in 2020 India had 31 cars and 172 two-wheelers per 1000 people while Pakistan had 16 and 99 based on vehicle registrations.
https://www.dataforindia.com/vehicle-ownership/
We need to bear in mind that the last census in India was in 2011. So the data on active household ownership of cars could be out of date or inaccurate as well.
So, as of now the number of new car sales/registrations from official sources is a more reliable statistic to compare. If indeed Pakistan were to have higher car ownership than India, why isn't that reflected in the sales numbers?
Vineet, "https://www.dataforindia.com/vehicle-ownership/"
ReplyDeleteWow what an authentic source of information.
G. Ali
G Ali,
DeleteYou just saw "India" in the URL and an Indian name for the author and decided it is unreliable? It specifically mentions the sources for those numbers and they aren't Indian sources.
Also, if you read my reply, I quoted that article as an example to illustrate how different statistics about "car ownership per 1000" are floating around online. It must also be noted that this specific Indian article is the source of India's number "38" in the same Wiki page about "motor vehicle" ownership you quoted above in the reply to Riaz Sb. That number of "38" specifically refers to car ownership alone, and does not count other motor vehicles like two-wheelers. On the other hand Pakistan's count of "121" includes both two-wheelers as well as cars (3 crore combined). If you take cars alone (70 lakh), the number of cars per 1000 people in Pakistan comes to "28", which if the numbers are correct would be significantly lower than India's.
https://profit.pakistantoday.com.pk/2023/08/01/secp-finds-only-2-77-of-total-registered-vehicles-in-pakistan-are-insured/
"The report categorises the 3 crore registered vehicles into 2.3 crore motorcycles and 70 lakh motpr cars".
In any case, its due to these discrepancies and inconsistencies in ownership numbers that I quoted the official numbers of new car registrations in India and Pakistan as a more reliable statistic.
Vineeth, "You just saw "India" in the URL and an Indian name for the author and decided".
DeleteYou are correct I did. But can you blame me? Your government and media has worked extremely hard to loose their credibility.
Question shouldn't be why I don't believe it, but why do you believe them?
But again, 80+ years of propaganda has effects on people's mentality.
G. Ali
G Ali,
Delete- "You are correct I did. But can you blame me? Your government and media has worked extremely hard to loose their credibility."
Our Riaz Sab here quotes from plenty of "Indian" articles and "Indian" authors as long as it is useful in bashing India with. But I suppose you do not lent much cedibility to that as well?
Vineeth,
Delete"Our Riaz Sab here quotes from plenty of "Indian" articles and "Indian" authors as long as it is useful in bashing India with."
Are you really that naive, do I need to spell it out for you?
G. Ali
G Ali,
Delete"Are you really that naive, do I need to spell it out for you?"
Please explain (or "spell it out" for me as you said), because I have no clue what you are trying to imply here.
Do you see a "credibility" problem with only those "Indian" sources that say India is doing good on something (or doing better than Pakistan on something), but not with those "Indian" sources (such as those quoted by Riaz Sb here) that say India is doing badly?
Vineeth, I have a problem with the BS of Indian media. It is rare that they tell the truth.
DeleteG. Ali
G Ali,
Delete- "I have a problem with the BS of Indian media. It is rare that they tell the truth."
I suppose then that sweeping statement of yours about "BS of Indian media" includes the left-liberal outlets Riaz Sb is quoting here and you don't lend much credibility to that either. That's fair enough, because otherwise I will have to conclude that it is not the "Indian media" per se that you have a problem with, but the narrative that doesn't agree with your preconceptions.
Vineeth, "left liberal media..." Same can be said about you. You cherry pick what comes out of GoI and God media but left is unreliable.
DeleteG. Ali
Markets have delivered their verdict on inflated growth claims, volatile reserves, and manufacturing stasis. The tariffs only made the message louder.
ReplyDeletehttps://frontline.thehindu.com/columns/rupee-decline-economic-mismanagement-trade-tariffs-structural-flaws/article70380697.ece
Blaming it on Trump
The government has tried to attribute the rupee’s collapse to exogenous shocks, particularly the Donald Trump administration’s decision in August 2025 to double tariffs on Indian exports to 50 per cent—among the highest imposed on any US trading partner. These tariffs, imposed ostensibly in retaliation for India’s continued purchase of Russian oil, affect over $48 billion worth of exports—more than half of India’s shipments to one of its largest trading partners.
The damage is undeniable. Labour-intensive sectors such as textiles, gems and jewellery, leather goods, and shrimp face devastating contractions in exports, with projected declines of up to 70 per cent in some segments. According to the Global Trade Research Initiative, a research group, Indian exports to the US could fall from a projected $86.5 billion this year to nearly $50 billion in 2026.
Yet, focusing on tariffs alone misses the bigger picture. A resilient economy with genuine export competitiveness, diversified markets, and robust domestic demand would have absorbed such a shock far better. The tariffs merely exposed vulnerabilities embedded by a decade of policy failure.
Failure on manufacturing front
Our manufacturing sector, despite a decade of “Make in India”, has failed to embed itself meaningfully in global value chains. And India’s inability to secure tariff relief despite multiple rounds of negotiations reflects not only geopolitical asymmetry but also the weakness of its economic bargaining position.
That India faced tariffs steeper than China (30 per cent) or Vietnam (20 per cent) is revealing.
When the BJP-led coalition took office in 2014, the rupee was hovering between Rs.58 and Rs.63. In just over 11 years it had crossed Rs.90. The slide has been relentless: from Rs.67 in 2016, and Rs.71 in 2019, to Rs.82 in 2022, and an accelerating fall thereafter.
The oft-cited average exchange rate of Rs.73 over the past decade obscures this acceleration. What matters is not the mean but the trajectory—and that trajectory points downward with growing speed, particularly since 2022.
Using reserves to prop up rupee
The regime frequently invokes our foreign exchange reserves as proof of macroeconomic strength. Reserves peaked at $704.9 billion in September 2024, triggering predictable triumphalism. But the euphoria did not last long.
Between September and November 2024, the reserves plummeted by more than $48 billion—from $705 billion to $656.58 billion—as the RBI burned through dollars trying to prop up the collapsing rupee. The reserves fell for eight consecutive weeks, with the largest weekly decline on record, at $17.76 billion, occurring in November 2024. By March 2025, the reserves had fallen to $668.3 billion, a 5.2 per cent decrease from the September peak. As of end-November, they stood at $686.2 billion.
This volatility exposes the fundamental dishonesty in the government’s narrative. These reserves are not a sign of organic strength; rather, their depletion is evidence of desperate intervention. The RBI has spent tens of billions defending an indefensible exchange rate, depleting reserves in a futile attempt to mask structural weaknesses. When the government celebrates forex reserves, it is celebrating the ammunition it must constantly expend just to keep the rupee from complete free fall.
GDP growth and other claims
The government routinely claims that India is the “fastest-growing major economy”, with headline gross domestic product (GDP) growth rates hovering between 6.5 per cent and 7 per cent. But such claims crumble under scrutiny. Growth slowed to 6.5 per cent in 2024-25 from 9.2 per cent the previous year, which itself was a figure inflated by base effects following the catastrophic contraction of 2020.
.
India Looks To Boost Nuclear; Power Demand Lags GDP Growth By Far - Bloomberg
ReplyDeletehttps://www.bloomberg.com/news/newsletters/2025-12-16/india-looks-to-boost-nuclear-power-demand-lags-gdp-growth-by-far
Why is India’s power demand up barely 1% if GDP growth is tracking 7%-8% this fiscal year?
It started with several reports that show power demand growth at 0.9% during April to November. That, too, on a weak base of 3% growth last fiscal year through March.
A key reason is a cooler summer and an extended monsoon — unseasonal rains in May and October lowered use of irrigation pumps in rural areas and air conditioners in cities, Murtuza Arsiwalla, director of research at Kotak Institutional Equities, told me.
But that doesn’t explain why power demand declined last month, making it the first November contraction in five years. Arsiwalla adds two more reasons to the list — a rise in off-grid power supply, such as captive and rooftop solar power, and moderation of industrial activity, which is 40% of all power consumption.
Typically, power demand growth is about 0.9 times GDP growth, with exceptions in some years. Right now, that ratio is running at about 0.1. Economists caution against reading too much into the correlation. One pointed to the less energy intensive services sector dominating economic growth. The other suggested rising energy efficiency across the economy, citing the modest increase in fuel consumption despite a pick-up in GDP growth post-pandemic as evidence.
To be sure, some analysts expect power demand to bounce back. Till that happens, the data casts a shadow over the strength of India’s economic recovery. It also spells trouble for an energy sector already concerned about oversupply and rising instances of solar power curtailment.
—————-
Tax collections of the Centre have grown only 4% between April and October 2025, way below the fiscal 2026 target of 11% growth
https://www.moneycontrol.com/news/opinion/india-s-gdp-outperformed-all-expectations-in-2025-but-low-nominal-growth-s-got-downsides-13721199.html
Interesting:
ReplyDeletehttps://asiatimes.com/2025/12/rupees-freefall-tells-the-real-story-about-indias-outlook/?utm_source=The+Daily+Report&utm_campaign=9b76c4b7a6-DAILY_16_12_2025_COPY_01&utm_medium=email&utm_term=0_1f8bca137f-9b76c4b7a6-16239543&mc_cid=9b76c4b7a6&mc_eid=5ddbeed1da
I wouldn't lent that much credibility to the Frontline article posted above. Though the points it raise especially related to inflated GDP growth numbers peddled by Modi & Co are valid, the article as a whole is more of a political diatribe targeting Modi govt from the beginning till the end rather than an objective analysis or criticism of the systemic weaknesses in Indian economy. You would see how it particularly criticize the economic performance of the "past decade" or Rupee's slide in the last "11 years" and doesn't talk of their performance in the years before.
ReplyDeleteAnother thing to keep in mind is that "Frontline" is a magazine with a hard-left slant in politics and economics. I know this well because I was a regular reader of Frontline during the MMS years. Its not just Modi's or BJP's right-wing politics that they have a problem with, but also India's privatization and economic liberalization policies post-1991 - even under Congress rule. They were generally sympathetic to the Maoist insurgency in central India as well. You would see their hard-left stance even in how they cover international affairs, by their incessant criticism of Western interventions or even minor incidents of rights violations in Western democracies while maintaining radio silence about such transgressions by authoritarian states such as China or Russia. In fact, I remember an article in that magazine about Syrian civil war which specifically attacked early US support for rebel groups and the US bombing of Raqqa targeting the Islamic State but didn't utter a word about the devastating bombing of Syrian cities by Assad regime and Russia! So, that's the objectiveness of Frontline for you.
But the Asia Times article posted above is more balanced and grounded, I think. Though Indian Rupee has been steadily sliding against US Dollar in value for decades, I think nearly all economists (including those from outside India) would agree that the sudden precipitous collapse of Indian Rupee witnessed in the past few months is largely on account of Trump's tariffs. Its common sense really. With India's exports to US badly hit by the 50% tariff, there are less Dollars coming in while the demand for Dollars to pay for imports remain high. Until a US-India trade deal materializes there is no way in the short term to arrest the slide except by the pointless exercise of wasting RBI's Dollar reserves.
And this tariff headache is not just from the US now, but also the equally formidable Mexican tariffs that came into force days ago. Though Mexican tariffs aren't specific to India and impacts other countries including China as well, it hits some Indian export sectors hard yet again - especially automobiles, as Mexico is a major export market for automobiles and auto parts manufactured in India. Greater emphasis on high-value manufacturing sectors and diversification of export markets is the only long-term solution for India's economic challenges and unemployment woes.
@ShoaibDaniyal
ReplyDeleteHad a fascinating chat with @arvindsubraman and Devesh Kapur.
They argue that India's official GDP data is wrong.
They posit that the liberalisation phase ended a decade+ back.
India's growth has fallen sharply since then.
https://x.com/shoaibdaniyal/status/2001998168041652333?s=61&t=mgTxrmITUbpo9NntN5677Q
https://youtu.be/KfEk0mEiK8I
In A Sixth of Humanity, political scientist Devesh Kapur and economist Arvind Subramanian set out to do something ambitious: chart India’s development journey from Nehru to Modi.
In this episode of Adda, they sit down with Shoaib Daniyal and break down the four stages of India’s development. Starting with Nehru’s planned economy, which they argue did not do what it set out to: import substitution. Rather than create a safe space for Indian industry to grow and then eventually take on international competition, it ended up nearly killing the private sector.
Interestingly, Modi might be doing something similar now by promoting so-called national champions like Adani and Ambani. Again, by allowing them to largely play in the domestic space, rather than making them take on international competition, these firms are not adding to India’s growth story.
Most shockingly, however, Kapur and Subramanian argue that India’s GDP growth has ground to a halt over the last decade or so, with them estimating that average growth has been only around 3%. For context, official data reported that India’s real GDP grew 8.2% in the second quarter of 2025-26.
Sushant Singh
ReplyDelete@SushantSin
An unambitious elite spoiled by finance — plus a working class held back by inadequate education and inequities of caste & gender — are stymying the emergence of a global middle class in India. The social change is nowhere on the horizon.
@andymukherjee70
https://x.com/SushantSin/status/2001881357849629144?s=20
------------
https://www.bloomberg.com/opinion/articles/2025-12-18/why-india-fell-off-the-global-middle-class-map
China now accounts for a sizable share of the more affluent middle-income earners, while India seems to have faded in relative importance.
The top of the pyramid in India is made up of the "Octopus Class," the 1 million super-wealthy individuals, while the bottom is bursting at the seams with 800 million people surviving on free food grains from the government.
An unambitious elite and a working class held back by inadequate education and inequities of caste and gender are stymying the emergence of a global middle class in India.
In 1980, neither China nor India had much representation in the “global middle class” — people who neither belong to the bottom half of the income distribution nor rank among the top 10% worldwide. Almost a half-century later, things have changed — but in very different ways. China now accounts for a sizable share of the more affluent middle-income earners, while India seems to have faded in relative importance.
This finding, nestled in the annual World Inequality Report, is a puzzle. After all, the only two countries with billion-plus populations are both believed to have done well by embracing capitalism and opening their economies after the collapse of the Soviet Union. China became the factory to the world; India became its back office. So why should the outcomes for their citizens be so different?
To unpack this puzzle, start with Indians who are outside the middle class. The top of the pyramid is made up of what Marcellus Investment Managers in Mumbai has termed as the “Octopus Class,”the 1 million super-wealthy individuals whose affluence and disposable incomes are close to first-world levels. This tiny group has earned high returns from financial markets, and grown rich by serving each other and affluent customers around the world as corporate honchos, bankers, lawyers, and other top professionals. But the bottom is bursting at the seams, particularly since the pandemic when 800 million people came to survive on free food grains from the government. They still do.
Between the bookends of wealth and welfare lies the problematic domain: work and wages.
In both China and India, surplus labor in agriculture followed the textbook model of development: It provided the ballast for industrialization, urbanization, and creation of a middle class. But unlike in China, where young people of both sexes migrated to cities, in India mostly the men went; women from landless peasant families found seasonal work at brick kilns and construction sites. Most others stayed back, leaving the most-populous nation with one of the worst rates of female labor force participation in the developing world. After the pandemic, this ratio began to rise. But that was largely because of an increase in work on the farm and self-employment. Those don’t pay enough.
Meanwhile, the opportunities for men who came to cities were limited by the reach of their caste, a birth-based social identity unique to South Asia. Although upward mobility at the lower end of the hierarchy has improved somewhat in recent years, it’s still severely restricted. State jobs, where historically discriminated groups could get the benefit of affirmative action, have become rare. Like their fathers before them, a majority of male workers remain trapped in low-productivity, low-income occupations, such as guards, chauffeurs, gardeners, and handymen.
Indian Middle Class Fell Off the Global Map
ReplyDeletehttps://www.bloomberg.com/opinion/articles/2025-12-18/why-india-fell-off-the-global-middle-class-map
Meanwhile, the opportunities for men who came to cities were limited by the reach of their caste, a birth-based social identity unique to South Asia. Although upward mobility at the lower end of the hierarchy has improved somewhat in recent years, it’s still severely restricted. State jobs, where historically discriminated groups could get the benefit of affirmative action, have become rare. Like their fathers before them, a majority of male workers remain trapped in low-productivity, low-income occupations, such as guards, chauffeurs, gardeners, and handymen.
Most of these findings are drawn from the State of Working India 2023 report by Amit Basole and his team at the Bengaluru-based Azim Premji University. (A new edition is expected in 2026.) As the economists have argued, India missed out on the expected transfer of labor from subsistence-oriented occupations to profit-led activity. Three out of four nonfarm workers are stuck in the informal sector.
A stunted middle class may be a direct result of this extreme inequality. Folks at the top of the ladder don’t see the teeming masses as a meaningful market, except for utilities, soap, short videos, and personal loans. Meanwhile, those at the bottom of the pyramid lack the education and skills to manufacture things for the wealthy at home and overseas. A rapidly digitizing economy needs young internal migrants for gig work — like deliveries for 10-minute quick commerce. While it’s no stepping stone to a middle-class life, it’s all that there is for the youth: The return on an additional year of schooling is lower than not just China, but also Sub-Saharan Africa, according to the World Inequality Report.
At the top of society, mobility is limited globally. Many in today’s Chinese elite are descendants of those who had prominent roles during the Communist revolution of 1949. India’s business tycoons are mostly a leftover of the mercantile interests that had thrived under pre-1947 British colonial rule. They’re guided by short-term returns. Instead of replicating their Chinese counterparts’ aggressive investment in technology, their one brilliant idea for scaling up manufacturing is to lobby for relaxed labor laws — so they can extract a 12-hour workday.
The top 1% Indians own 40% of overall personal wealth, but Gen-Z billionaires are bored with business. They would rather park their fortunes in family offices than start new enterprises. In the Soviet-styled planned economy that extended up to the 1980s, their grandparents scrambled for licenses. Nowadays, their parents just fight each other for a favorable government policy and haggle with private-credit firms for refinancing.
An unambitious elite spoiled by finance — plus a working class held back by inadequate education and inequities of caste and gender — are stymying the emergence of a global middle class in India. The social change that can fill the gap is nowhere on the horizon.
The way I see it, India's twin mistakes were in embarking on economic reforms rather late (and then too slow), and an over-emphasis that was placed on some services sectors like IT at the expense of manufacturing. As anyone can see, services sectors like IT require educational qualifications far higher compared to manufacturing, and in a country like India where a large section of the working-age population have barely high school education they benefit only a smaller elite. That historically disadvantaged sections of the population (like the lower castes) fell behind was largely on account of this lopsided industrial policy.
ReplyDeleteHowever, whenever I read such articles about how Indian economy's share of manufacturing has diminished or how its middle class is doing badly, there is an interesting contradiction like I pointed out in my earlier comments. If India's middle class was really contracting or becoming less affluent, shouldn't they be buying fewer cars? And shouldn't they be preferring smaller, cheaper models like the Suzuki Alto or S-presso over more expensive models? After govt enforced tighter emission and safety regulations, car prices in the Indian market shot up considerably in recent years making even small cars and commuter motorcycles/scooters less affordable for the masses. This, and the higher taxes had impacted auto sales. So, the historic surge in car and two-wheeler sales that was witnessed in the just concluded festive season can perhaps be explained as a one-off phenomenon due to the release of pent up demand after govt slashed taxes on cars and motorcycles (which effectively reduced their prices to 2019 levels).
However, the recent years have also seen another unmistakeable trend - the switch of Indian car buyer's preferences from small cars to more expensive SUVs. Budget hatchbacks simply don't sell anymore. In fact, even after substantial price reductions owing to lower taxes, Maruti Suzuki advertised further festive discounts in a bid to clear its large unsold stock of Alto and the S-presso. But either due to the aspirational/prestige factor or out of greater concern for safety on Indian roads, Indian car buyers no longer want small cars. What do such buyer preferences say about the state of the Indian middle class?
And as for manufacturing, it can be rightly claimed that Indian auto manufacturing sector has truly come of age in recent times. From manufacturing sub-150cc no-frills commuter motorcycles and budget hatchbacks, India's auto brands has graduated to making and exporting mid-capacity motorcycles and SUVs. In fact, how far Indian auto manufacturing sector has come was starkly evident when I looked at product portfolios of Pakistan's auto brands. Looking at cars, I was stunned to see the Pak Suzuki Alto selling at more than double the price of a Maruti Suzuki Alto when converted to US Dollar prices. (Perhaps it has to do with Pak Suzuki Alto being the Japanese spec-model that is imported as CBUs or assembled from CKD kits with minimal localization.) And as for motorcycles, seeing the Suzuki and Atlas Honda motorcycles sold in Pakistan was like taking a trip a couple of decades back in time, especially when compared to the models that the same Suzuki, Honda and Yamaha sell in India. Perhaps the contrast can be explained by Pakistan's much smaller market that doesn't have space for many competitors or give companies economies of scale to invest in manufacturing.
That said, I must admit the success of India's high value automobile manufacturing hasn't been replicated in other sectors. For instance, though India may have answers to China's auto giants (even if smaller in scale owing to a smaller industrial base and market), it has no answers to China's electronic giants. There is as yet no Indian Huawei or Xiaomi.
ReplyDeleteIgnis Rex
@Ignis_Rex
India’s Missing Middle: A Society Without Values Cannot Create Prosperity
India’s absence from the global middle-class map is not a statistical anomaly—it is the logical consequence of a society that has never been built on principles, values, or institutions that sustain prosperity.
Bloomberg’s recent analysis rightly points out India’s fading presence in the global middle-income bracket. But the deeper truth is this: India is not merely unequal; it is structurally incapable of producing a middle class.
A Hollow Growth Story
For decades, India has been celebrated as “the next big market.” Economists and investors have projected a rising consumer base, a demographic dividend, and a vibrant democracy. Yet the reality is starkly different. India’s economy is polarized between a tiny elite and a vast underclass. The so-called middle class is a mirage—fragile, precarious, and dependent on patronage rather than merit.
Unlike China, which built factories, infrastructure, and disciplined institutions to lift hundreds of millions into middle-income status, India has relied on slogans, subsidies, and rent-seeking. The result is an economy where luxury malls flourish for the elite, while the majority struggle for subsistence. There is no broad-based demand, no stable middle-income consumer, and no genuine ladder of upward mobility.
Why Inequality Is Entrenched
India’s inequality is not simply economic—it is cultural and institutional.
- Caste and tribalism: Social hierarchies remain rigid. Meritocracy is suffocated by caste privilege, nepotism, and political favoritism.
- Corruption as culture: Rules are bent, contracts ignored, and corruption normalized. In India, dishonesty is not an exception—it is the operating principle.
- Absence of civic values: Societies that sustain a middle class are built on trust, accountability, and respect for law. India has none of these. Institutions are hollow, enforcement is arbitrary, and opportunism is the only ethic.
- Protectionistic policy that punish foreign manufacturers and brands for being successful in the Indian market and dare to compete successfully against local heroes. India normally used tax and custom procedures to harrass these foreign companies.
Why is value and principle important for a society? Without values, inequality becomes entrenched. Without principles, institutions collapse into corruption. And without institutions, there can be no middle class.
The Mirage of Democracy
India’s defenders point to its democracy as a safeguard. But democracy without values is merely populism. Elections are won through caste arithmetic, handouts, and manipulation. Policy is reactive, incoherent, and designed to appease factions rather than build institutions. The middle class, which in other societies acts as a stabilizing force, is too weak to play that role in India. Instead, politics amplifies division and entrenches inequality.
Global Implications
India’s failure to build a middle class has consequences beyond its borders.
- Economic fragility: Without a strong middle-income base, India’s growth story is unsustainable. Domestic demand will remain polarized, vulnerable to shocks, and incapable of driving global markets.
- Geopolitical weakness: India cannot credibly claim to rival China when it lacks the social and economic foundation of a middle class.
- Investor caution: For global capital, India offers opportunities at the top and bottom of the pyramid—but the broad consumer market that sustains long-term investment is missing.
Conclusion
India’s missing middle is not a temporary setback—it is the inevitable outcome of a society that has never embraced values of fairness, merit, or accountability. Until India confronts its cultural and institutional dysfunction, it will remain a deeply unequal society, incapable of producing prosperity for the majority of its people.
https://www.bloomberg.com/opinion/articles/2025-12-18/why-india-fell-off-the-global-middle-class-map
https://x.com/Ignis_Rex/status/2001987658726396311?s=20
Sushant Singh
ReplyDelete@SushantSin
Lunching (Lynching) in India, particularly of young Muslim men, the data is self evident since 2014. Look at the % of IPS officers who consider that mob action, outside the law, is justified. This is what New India is.
https://x.com/SushantSin/status/2002251845637677107?s=20
----------------
AI Overview
The phrase "Lynching in India refuses to die" refers to persistent incidents of mob violence in India, often targeting minorities, despite existing laws and low conviction rates. A recent "Datanomics" report from Business Standard highlights statistics and the lack of comprehensive national legislation.
Key Data Points (2014-2023)
According to the "Datanomics" analysis by Business Standard using data from various sources:
India recorded 189 lynching cases between 2014 and 2023.
These cases represent less than 1% of over 526,000 total incidents of mob violence during the same period.
The data collection on mob lynching by the National Crime Records Bureau (NCRB) was discontinued in 2017 due to the data being deemed "unreliable" as these crimes are not specifically defined in law at the national level.
Legal and Social Context
As of late 2025, only four states in India—Manipur, Rajasthan, West Bengal, and Jharkhand—have enacted their own anti-lynching laws.
The Supreme Court of India has previously warned of "mobocracy" and urged the central government to pass a national anti-lynching law, but this has not yet happened.
Many lynchings have been related to rumors spread via social media, such as those concerning child abduction or cow slaughter, with victims often belonging to minority communities.
Critics have accused the Hindu nationalist government of failing to forcefully condemn the violence, while others argue that the narrative is selectively reported to create polarization.
For more details, the original report can be read on the Business Standard website.
https://www.business-standard.com/india-news/datanomics-lynching-persists-in-india-despite-laws-and-low-conviction-125121900689_1.html
I wouldn't lend much credence to the X post above. I mean, who exactly is this "Ingnis_Rex" hiding behind a pseudonym? Is he/she an economist? A social scientist? Is he/she one among the multitude of anonymous X handles who peddle narratives that suit their political agenda? Who knows?
ReplyDeleteAs for Andy Mukherjee's article in Bloomberg (which you have quoted earlier as well), what I can gather from it is that he is essentially judging India by using China as the benchmark or yardstick in economic growth. Considering that both are countries with billion-plus population, isn't that a fair apples-to-apples comparison? Well, yes and no. Yes, because both countries have similar population and were at a broadly similar level of economic development 50 years ago. No, because the two countries have vastly different political systems which makes a whole lot of difference.
China is a one-party totalitarian dictatorship where one political group holds all the levers of power - whether it be at Beijing or the provinces, courts, police and media. Its enforces a uniformity and obedience across the country with an iron hand. There is almost nothing outside the stranglehold of the Party, not even its private companies (as the fate of Alibaba's Jack Ma shows). For the Chinese government, implementing economic reforms, establishing industries, building massive powerplants, and relocating millions of people is as simple as issuing an order to the relevant departments. It is this tightly integrated political system with no room for dissent that has enabled the meteoric rise of China as an economic powerhouse in the last few decades.
India, on the other hand has been a rather messy (and often unwieldy) democracy from the beginning with various political forces pulling it in different directions. Even with Modi's efforts to concentrate all the power in his hands and buy off the allegiance of much of the national and northern regional media outlets, large swathes of the country especially in the south and the east still remain outside of his party's grip. There still many regional language media, as well as English-language left-liberal outlets that openly publish narratives against him. And then there are the judges of the Supreme Court who have a mind of their own. All of these create many headaches even for strongman like Modi to drive his economic policy. He had to repeal farm laws (passed by the Parliament and signed into law by the President) due to unyielding opposition from farmers in Punjab and Haryana. His pet project to build a bullet train line from Mumbai to Ahmedabad was delayed for years when the political oppositon who then ruled Maharashtra state was non-cooperative. When was the last time one heard of popular opposition to a massive dam or industrial project in China that involved displacement of large numbers of people? In India, such protests, agitations and legal challenges are the norm as India's political system provides space for that.
To sum up, although I would like to see India develop at breakneck speeds the way China has done, I must confess it is never going to happen. The China model simply wouldn't work in India. India will have to figure out its own growth model, and its going to be slow.
Vineeth, I am in awe of your intelligence and knowledge, didn't know that China is a dictatorship whereas India is a democracy.
DeleteThere are about 10,000 farmers who who commit suicide in India every year. I am sure they die happy that they and their family may not have enough to eat but at least they have a right to vote.
But again, they are probably not your caste so you don't care
G. Ali
G Ali,
DeleteThank you, but let's keep personal compliments and prejudices out of the discussion. I expressed my POV above about why India and China isn't exactly an apples-to-apples comparison and why the difference in political systems can have a major impact on economic growth models and trajectories. If you have something to add on that subject, or something you disagree with my explanation above, please do share.
Thanks.
Vineeth, amazing. A single mention of India in negative light or positive info about Pakistan and you go on long rants and you are telling me to keep personal prejudices out of discussion?
DeleteThe sad part is that you will never see your own prejudices, not to mention double standards.
And yes , one can not compare China with India. As per LKY, China is a nation and has been
for thousands of years and India is make belief nation.
G. Ali
As for India's middle-class question, I would still like some economist or analyst to explain the seeming contradiction of a supposedly shrinking or impoverished middle class ditching inexpensive small cars and going crazy after compact and mid-size SUVs. Coincidentally, there was an insightful podcast on Autocar India's Youtube channel on this very same phenomenon yesterday. Not likely to be of interest to Pakistanis, but I'm pasting the link in case anyone is interested.
ReplyDeletehttps://youtu.be/ztreaSV2Y0c?si=mR_H0u1ltdKrU7VW
They aren't bluffing. When I take my humble 2012 Suzuki Alto to the congested roads in our small town in Kerala, I look in vain to see examples of the newer 2022 model Alto. With the exception of some of the older models, newer examples of the car that once defined the Indian middle-class's car aspirations is nowhere to be seen! All the new cars I see on our roads are SUVs - Hyundai Creta, Kia Seltos, Tata Punch, Mahindra Thar and the like. And as they say at mark 10:13 in the video, this explosion of India's SUV market and the switch away from small cars was in the last few years (when India's economy is supposed to have slowed down).
https://youtu.be/ztreaSV2Y0c?si=mR_H0u1ltdKrU7VW&t=10m13s
And as for the India's "bored billionaires" who would rather park their money abroad than invest in the country's economy, I suppose the billionaire industrialists who run India's automotive giants like Tata, Mahindra, Ashok Leyland, Eicher, Bajaj, TVS, Hero and Royal Enfield are insignificant exceptions than rule.
The Economist published the Human Development Index. Of interest to me is why Pakistan has fallen to Low HDI whereas even Nepal is Medium HDI. Bangladesh has progressed well and is tied with India but both are still Medium HDI.
ReplyDeleteNathan, it the UN that publishes the HDI report not economist.
ReplyDeleteThey say that all governments lie. This is specially true in 3rd world countries. Pakistani governments have a vested interest in showing a negative picture of the country, that way they get to ask for more financial support from international doner agencies.
G. Ali.
G Ali,
DeleteI can guess why incumbent governments in democratic setups would want to make their economic performance look better than what they are. They have to face the electorate with a narrative and win elections after all. But it is amusing to hear of governments doing the reverse eventhough it would inevitably reflect badly on themselves. Is it that the Pakistani "government" doesn't fear a loss of legitimacy in the eyes of the electorate, or see a need to get their votes? Why would they have such a "vested interest" in getting aid from international donor agencies even at the risk of painting a poor picture of their own country? Is it that the country's economy is doing so bad that it would collapse without external support? Or is it just to fill their own pockets?
Does this also explain why the Pakistan's middle class is buying fewer cars (per capita) than their Indian counterparts? Are they helping prop up the "vested interests" of their governments by spending less?
As a Pakistani who knows the country and its political system better than I do, perhaps you can enlighten me.
@G Ali
DeleteYes, UN is the source but The Economist published in its magazine. That gives it some legitimacy. What is alarming is that the blogger allowed your comment suggesting that Pakistan Government lies more than the Bangladesh government all the while Haq highlights positive government data himself.
Further, I believe after reading some of the posts that, this is one of those India-Pakistan bashing each other sites.
Nathan, first of all just remember that in India government goes to the people every 5 years so it has to project success. BD was ruled by Sheikh Hasina for over 15 years, she needed to show progress.
DeleteI am not saying that all data is incorrect but I would take it with a grain of salt everything governments in developing world says.
I agree, it is sad that both countries are barely above Sub Saharan Africa in HDI index and yet we argue as if we should be proud of our achievements.
G. Ali
Vineeth,
Delete"Does this also explain why the Pakistan's middle class is buying fewer cars (per capita) than their Indian counterparts?".
Congratulations, Indian middle is buying more cars than their counter parts in Pakistan. HAPPY?
Now please tell if you are familiar with Gini Index? Fact is Pakistan has one of the best Gini index in South Asia, if not the best. Which means the income is more equally distributed between rich and poor. If India is doing so well then why is it on par with Pakistan on hunger index, why is the suicide rate double, why 10k farmers commit suicide every year and why are so unhappy and racist?
Above all why such a lack of empathy for the poor on your part, again is it a caste thing?
G. Ali.
G Ali,
Delete- "Above all why such a lack of empathy for the poor on your part, again is it a caste thing?"
I'm aware you have a penchant to bring caste, religion and personal invectives to every discussion. Can we please avoid that and stick to the topic?
You made a statement that Pakistani government has a "vested interest" in making its country look poorer than it is just for the sake of getting aid money (for whatever purpose). In other words, you implied that the Pakistani economy is actually faring better than it is made out to be. My questions to you regarding the motivation of the Pakistani officials in framing such a self-deprecating narrative, as well as the statistics of Pakistani middle class buying fewer cars (per capita) than their Indian counterparts were in response to that. Perhaps you can give an logical explanation for those?
Vineeth, Dodge the straight forward question.
DeleteIn other words my assumption is correct, you have no empathy for the poor, must be a caste thing.
G. Ali.
G Ali,
Delete- "Dodge the straight forward question."
Yep, exactly what you have done here. :)
- "In other words my assumption is correct, you have no empathy for the poor, must be a caste thing."
Here we go again. But feel free to make as many "assumptions" as you like about my supposed lack of "empathy for the poor" or my "caste" if that gives you joy. :)
Vineeth, caste discrimination can not be a cause of joy for any right minded human.
DeleteBut let's get back to the original question.
We agreed that per capita more automobiles are sold in India.
So, can you please explain why India in on par with Pakistan on hunger index? why is India's suicide rate so high? Why thousands of farmers commit suicide every year, why Indians are so unhappy and down right racist?
Just want your honest opinion.
G. Ali
G Ali,
DeleteBut you seem to relish dragging caste, religion and personal attacks into every discussion. You do not even know what my caste is, or whether I am religious, casteist or atheist, but is happy enough to make "assumptions" about those. Doesn't that say more about yourselves than it does about me?
But yes, lets go back to the original question by all means. You still haven't answered the question which I asked you first. Why would Pakistani authorities have a "vested interest" (as you say) in making it seem that the country is doing worse than it actually does, eventhough such a narrative would make little political sense as it reflects badly on their own performance? Why are they seemingly ready to shoot themselves on the foot and risk losing credibility in front of the electorate just for getting aid money from donors? Is it to fill their own pockets or is it that they genuinely fear the country's economy would go over the precipice without external aid?
Vineeth,
Delete"Why are they seemingly ready to shoot themselves on the foot and risk losing credibility in front of the electorate just for getting aid money from donors"
Have you checked the list of Pakistani PMs in last 20-25 years? None has completed a full term, so the PM running for election can always blame the previous guy.
Now, please reply to my question honestly.
G. Ali
G Ali,
DeleteYou still haven't answered the "original question" I asked regarding the statement you yourself made above. WHY would Pakistani authorities have a "vested interest" (as you stated) in making it seem that the country is doing worse than it actually is, at the risk of advertising their own incompetence? What do they need the aid money for? Is it to fill their own pockets, or do they fear the country's economy will collapse without external aid support? Please give a straight-forward answer for these. (I'm sure you would agree that farmer suicides in India has nothing whatsoever to do with this question.)
Thanks.
Vineeth, I didn't answer the question? Are you really that naive or you want me to say something else.
DeleteAnyway, you know most developing countries are ruled by corrupt rulers. They do anything to fill their pockets. So yes I think Pakistani rulers show a different picture so they can get more money, fill their pockets and move on
It is based on my personal opinion, what I see on the street and what we see in the numbers are quite different.
Now, your honest opinion about my questions?
G. Ali
G Ali,
Delete- "I didn't answer the question? Are you really that naive or you want me to say something else."
No, you were beating around the bush the whole time without giving a straight-forward answer to the question, and was instead resorting to the classic "trolling" strategy of diverting the conversation in some other direction through "whataboutery" and by introducing caste, religion and racism into the discussion for no other conceivable reason. And not for the first time either, so it wasn't unexpected.
- "Anyway, you know most developing countries are ruled by corrupt rulers. They do anything to fill their pockets. So yes I think Pakistani rulers show a different picture so they can get more money, fill their pockets and move on.."
Tell me, is it because of Pakistani rulers filling their pockets through painting a negative picture of their country (as you say) that the country finds itself knocking on the doors of IMF for a bailout every few years - while India doesn't? What's the key to the difference here? Are Indian politicians less "corrupt" than their Pakistani counterparts? Or is it that they are more competent than their Pakistani counterparts in running the economy?
- "It is based on my personal opinion, what I see on the street and what we see in the numbers are quite different."
Personal opinions are just that, and nothing more. Every person you meet on the street can have their "personal opinions" about everything happening under the sun. But what we all can agree on are numbers and statistics and what they imply.
- "Now, your honest opinion about my questions?"
I would never claim India is doing well or doing enough in its social obligations of eradicating poverty and hunger, educating its population or providing them gainful employment. And as you have pointed, India and Pakistan are essentially on the same boat on these even if India ranks a couple of rungs higher than Pakistan on one index or a couple of rungs lower in another.
However, what I disagree with here is the talk or implication that Pakistan's economy and its middle-class are somehow doing better than India's - as the numbers contradict those assertions.
@SushantSin
ReplyDeleteBut middle class is getting low inflation.
https://x.com/sushantsin/status/2004783966528962574?s=61&t=mgTxrmITUbpo9NntN5677Q
———-
Floods, low crop prices leave Indian farmers under stress
Market prices of key crops fell below MSP, squeezing farmer incomes severely across regions
https://www.livemint.com/economy/india-farmers-agrarian-distress-minimum-support-price-msp-agricultural-economy-monsoon-grains-pulses-oilseeds-11765508045260.html
India struggled to protect farmers as the country’s agrarian distress worsened in 2025. Severe monsoon rains caused devastating floods in Punjab, inundating 200,000 hectares of farmland, besides damaging crops in Haryana and Maharashtra, notably the Marathwada region. As a result, farmers faced a loss of income and soil damage and sought better compensation and long-term support.
If that was not enough, lower market prices for their produce further eroded their income. Prices for several key commodities slipped below the minimum support price (MSP), at which the government procures produce from farmers. While the broader macroeconomic environment benefited from low food inflation, the decline in farmgate prices raised serious concerns about rural incomes and the overall stability of the agricultural economy.
Low inflation can adversely affect rural incomes if farmers are forced to sell below the benchmark procurement price. The prices of grains, most pulses and oil seeds such as soybean, groundnut and sunflower are currently below their MSP.
Deflation in wholesale crop prices pulled consumer inflation down to a record low of 0.25% in October (year on year). Food prices, which account for about 40% of the consumer basket, fell 5% from a dip of 2.3% in September. The development assumes significance given that about 42% of India’s 1.4 billion population depends on agriculture for livelihood. The sector accounted for 18% of India's GDP in FY24.
The Centre is working on a contingency plan to prevent distress sales during the procurement season, when crop prices slipped below MSP in many states, Mint reported on 24 October.
Officials from the agriculture ministry, department of food and public distribution and Niti Aayog discussed raising procurement to protect farmer incomes, following the steep disinflation in pulses and oilseeds prices this year, which came after a surge in FY24. Besides assured procurement at MSP, the plan was to include supportive measures like facilitating export of produce to overseas markets and covering part of the losses due to the price slump.
Taking a step in this direction, the government, under the pulses mission, announced 100% procurement of tur, urad and masoor at MSP for four years. The prime minister launched the Mission for Aatmanirbharta in Pulses (FY26 to FY31) with a budgetary allocation of ₹11,440 crore
on 11 October. It aims to ensure 100% procurement of these pulses at MSP, besides increasing their cultivation area and production.
The government approved continuation of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) to FY26. The scheme enables procurement of oilseeds at MSP by central agencies including the National Agricultural Cooperative Marketing Federation of India Ltd. (Nafed) and the National Cooperative Consumers' Federation of India Ltd (NCCF).
Analysts are of the view that with enhanced procurement and bufferstock building, the government is taking steps to prevent distress sales. However, these are still not sufficient.
ndia's private debt to GDP ratio varies by definition but recent data points to household debt around 41-42% of GDP (March 2025) with a broader private non-financial sector credit closer to 94-95% (Q2 2025), indicating significant leverage, though household borrowing increasingly leans towards consumption-based loans. While rising from historical averages, India's household debt remains lower compared to countries like China or Malaysia, according to RBI reports, notes The Economic Times.
ReplyDeleteKey Figures & Trends:
Household Debt: Around 41-42% of GDP (March 2025), up from a 5-year average of ~38.3%, notes RBI data and The Economic Times.
Non-Financial Sector Credit: Total credit to the private non-financial sector was ~94.6% of GDP in Q2 2025.
Shift in Borrowing: A growing portion (over 50%) of household debt is now for consumption (personal loans, credit cards) rather than housing.
Context:
These figures highlight increased private leverage, but the RBI considers the overall household sector resilient, with more prime-rated borrowers overall, according to this video.
The debt-to-GDP ratio measures the outstanding debt of households and companies relative to the size of the economy (GDP).
To help me provide a more specific analysis, are you interested in the debt levels of households, non-financial corporations, or the combined private sector?