By P. Sudhir
The CEO of NITI Aayog has asserted that India has emerged as the fourth-largest economy. He was at least truthful enough to concede that this was based on the International Monetary Fund’s (IMF) projections for 2025-26 in its World Economic Outlook. Through further elaborations, we precisely come to know that India’s nominal GDP is projected to increase to USD 4,187.017 billion ahead of Japan’s USD 4,186,431 billion by a whisker. It is altogether a different proposition that India’s per capita income happens to be a mere one-thirteenth of Japan’s in nominal dollar terms.
Therefore, the current excitement among the apologists of the Modi government’s economic think tank which is further amplified by sycophants of the Godi media, sounds bizarre. Actually, this near-obsession with the overall GDP figures is not accidental. It is characteristic of the finance-driven neoliberal economic paradigm. It helps to conceal more about the condition of the people and their livelihood than it reveals. While part of a global trend, this distortion is particularly pronounced in India, now counted among the most unequal economies in the world.
According to the World Inequality Report 2022, the top 1 per cent of India’s population holds more than 40 per cent of the nation’s wealth, while the bottom 50 per cent holds just 3 per cent. Income inequality is equally stark — the top 10 per cent earn over 57 per cent of the national income. In this context, the obsession with overall GDP and even per capita GDP is not merely a misleading metric; it is a deliberate construct designed to distract public discourse from the cruelty being pursued by the corporate–communal nexus.
The underpinning is loud and clear. As Alfredo Saad-Filho, the noted Brazilian economist, observed in 2006, under the finance-driven neoliberal regime, there is “exploitation and social domination based on the systematic use of state power to impose, under the ideological veil of non-intervention, a hegemonic project in all areas of social life.” Under the dictates of financial markets and the global interests of US capital, the production of goods and services has ceased to be the principal function of capital. Instead, capital is now deployed primarily to generate short-term super-profits through speculative financial activities.
Mediated by finance, the control over three main sources of capital in the economy — state finance, the domestic savings pool, and the linkages between domestic and foreign capital — has grown increasingly unregulated and concentrated. This dynamic is reflected in the desperation with which the Trump administration pursued a tariff war in an attempt to revive domestic manufacturing jobs. Ironically, it was under the aegis of US-led imperialism that the global dominance of finance was first established.
At the turn of the century, in 2000, global foreign institutional investment (FII) soared to USD 400 trillion, compared to global foreign direct investment (FDI) of just USD 65 trillion — for every dollar of direct investment, there were seven dollars channeled into speculative instruments such as stocks and derivatives. Nearly a quarter-century later, the dominance of finance is even more pronounced. Clearly, the IMF’s projected GDP figures do little to explain the inner workings of contemporary capitalism or its devastating consequences for the working class.
In India, the top 1 per cent of the population controls 40 per cent of the total GDP. This means that nearly 1.4 billion people are left with a per capita income of just around USD 1,670. If we remove the top 5 per cent, who control 62 per cent of the nation’s wealth, the average drops further to approximately USD 1,100 — less than Rs1 lakh annually. This reflects the grim reality faced by the overwhelming majority of the population.
Compounding this inequality is the sector-wise asymmetry in GDP contribution. The bulk of the GDP is generated by capital-intensive service sectors and large corporate enterprises. Meanwhile, those engaged in the unorganised informal sectors and agriculture — who constitute a significant portion of the workforce — contribute only a minuscule share to the total GDP. As a result, growing unemployment is accompanied by a deepening crisis in sustainable incomes and livelihoods.
Globally, policy capture by the wealthy has shaped tax policies, regulatory frameworks, and public investment decisions to their advantage. In India, this capture is even more acute. The increasing stranglehold of corporate interests, coupled with the rise of crony capitalism, has led to a systematic transfer of public assets — including natural resources — into private hands. While corporate profits have soared, the share of labour in national income has sharply declined.
The situation in India is particularly dire. Demonetisation dealt a severe blow to the informal economy, which bore the brunt of the disruption. The aftermath of the COVID-19 pandemic only worsened the condition. In such an environment, there is no scope for generating additional employment or ensuring sustainable incomes.
Even the nominal increase in total GDP offers no evidence of shared prosperity. Beyond the working poor and the unemployed, even the middle classes are increasingly vulnerable — not just being left behind, but at risk of sliding downwards.
In the absence of redistributive policies, the elite can afford to opt out of public services — relying on exclusive private schools, corporate hospitals, and gated communities. This erodes the political will to invest in universal public systems. For the 800 million Indians struggling with basic nutrition, housing, education, and healthcare, GDP rankings are irrelevant.
The rise of a corporate–communal nexus is not accidental; it serves to divide people along identity lines, ensuring the regime’s continued dominance. In this context, united and collective struggles by the people remain the only viable path forward. (IPA Service)
