Economic superpower’s social failure? Inequality, malnutrition and crisis of India's democracy

By Vikas Meshram 

India may be celebrated as one of the world’s fastest-growing economies, but a closer look at who benefits from that growth tells a starkly different story. The recently released World Inequality Report 2026 lays bare a country sharply divided by wealth, privilege and power. According to the report, nearly 65 percent of India’s total wealth is owned by the richest 10 percent of its population, while the bottom half of the country controls barely 6.4 percent. The top one percent—around 14 million people—holds more than 40 percent, the highest concentration since 1961. Meanwhile, the female labour force participation rate is a dismal 15.7 percent.

Income patterns mirror this skew. The top 10 percent earn 58 percent of total national income; the bottom 50 percent manage only 15 percent. In a decade of promises, slogans and reforms, the income gap between the rich and the poor has barely moved—from 38 to 38.2 percent. On paper, India’s average per capita income is €6,200 and average wealth €28,000, but these national averages conceal massive disparities. Despite claims that 248 million citizens have risen out of poverty, basic government data show that over 41 percent still lack proper housing and more than 31 percent cannot access balanced nutrition. Premium consumer demand booms, while affordable housing shrinks. Economic liberalisation brought growth, but it also delivered deep and accelerating inequality.

This divide is not uniform across geography or class. Development disparities between states widen the gap, while displacement from land and forests uproots millions. Rural India, crippled by land inequality, low agricultural productivity, and poor education access, struggles to generate stable employment. A majority of Indians toil in the unorganised sector for low, insecure wages. Skilled and unskilled workers inhabit different economic worlds, and many young graduates find themselves overeducated for the jobs they secure.

Globalisation has ensured that high-skilled service sectors capture new wealth, while manufacturing stagnates. Indirect taxation makes the poor pay proportionately more for essential goods, eroding disposable income and accelerating vulnerability. The structural causes are well-known: unequal access to education and health, persistent discrimination based on caste, gender and region, and uneven distribution of employment opportunities and public resources. Inflation and indifferent governance compound the crisis.

In concrete terms, these numbers reflect lived experience—rising conflict, weakened social harmony, and deep resentment. As inequality rises, so do the risks to democracy itself. Politicians campaign on equality and opportunity while simultaneously relying on the wealthy for financing and influence. The World Inequality Report calls for policies such as wealth taxes and super-taxes—tools long resisted in public debate—to redistribute resources and reverse entrenched privilege.

The harshest expression of inequality is seen not in bank balances but in children’s bodies. A United Nations report shows India remains one of the world’s worst performers on child malnutrition. Around 21.9 million children under five are wasted—underweight for their height—representing 18.7 percent of all Indian children. Only South Sudan fares worse. Stunting affects 31.7 percent of children, the largest number in the world. Malnutrition weakens immunity, cripples physical and cognitive development, and condemns entire generations to diminished futures. India is unlikely to meet global nutrition targets for 2030; the gap is not closing fast enough.

This national picture is mirrored in a more global humanitarian crisis. The Global Food Crisis Report 2025 reveals 295 million people across 53 countries faced acute food insecurity last year—137 million more than the year before. Conflict, displacement, inflation and climate shocks have pushed hunger to unprecedented levels. Yet international food aid and nutrition funding are falling, a historic failure described by UN Secretary-General António Guterres as “a failure of humanity”.

Caste and class determine who is left behind. Tribals—120 million today—are virtually absent from the wealthiest 10 percent. With Dalits now numbering around 240 million, it is doubtful that even a tiny fraction appear among the top earners who control most national wealth. The same applies to the 30–35 percent Extremely Backward Classes and the 700 million in the OBC category. For the majority of Indians, economic growth has not translated into shared prosperity.

Labourers, farmers and informal workers form India’s economic backbone but remain shut out of wealth creation. Of India’s 643 million workers, 312 million are in the unorganised sector and 159 million earn their living through agriculture. These groups contribute to the nation’s prosperity but gain almost nothing from wealth accumulation. The result is a near-complete disconnect between economic contribution and economic reward.

Even political financing reflects skewed power. In 2023–24, the Bharatiya Janata Party received ₹2,243 crore in declared donations—88 percent of all donations to national parties—more than triple the previous year. Wealth and power reinforce each other, shaping public policy, dominating media and deciding which issues matter. The line between economic privilege and democratic influence grows thinner each year.

This is precisely the danger Dr B.R. Ambedkar warned about during the framing of the Constitution: if social and economic inequality persists, political democracy becomes hollow, and eventually collapses under its own contradictions. India, a $3.5-trillion economy that allows millions of children to go hungry, risks becoming a case study in development without dignity.

Yet nothing about this trajectory is inevitable. Inequality is not a natural law—it is a political choice. With progressive taxation, stronger public services, universal social protection, investment in small farmers and workers, and policies designed to dismantle caste and gender barriers, India can chart a different future. An egalitarian society is not charity—it is the foundation of democracy.

Economic growth will ring hollow until its fruits nourish the many, not enrich the few. The true test of a rising India is not its billionaires but the health, nutrition and dignity of its poorest citizens. Until that test is met, the claim of global superpower status will remain, at best, an illusion—and at worst, a mask concealing a deep moral failure.