Is India's growth becoming unfair? Experts weigh in

Post-COVID, India's economic growth has adopted a K-shaped trajectory characterized by pronounced inequality, a concern further reinforced by the latest GDP numbers.

While overall GDP showed robust growth of 7.3%, the agriculture and related services sector, which employs more than half of the population, grew by a modest 1.8%, according to the National Statistical Organization (NSO). .

The services sector presents a differentiated scenario, with an overall growth rate of 7.7%: trade, hotels, transport and communications – sectors with significant employment – recorded growth of only 6.3%, indicating a concentration of growth among a select few.

Consumption growth stands at a meager 4.4%, in stark contrast to the nearly 11% increase in gross fixed capital formation, raising concerns about the fair distribution of growth benefits.

However, this view is disputed by prominent figures like SBI's Chief Economic Advisor and Chief Economist Soumya Kanti Ghosh.

Pranjul Bhandari, chief India economist at HSBC, acknowledges previous concerns about a K-shaped recovery but observes current positive trends. Factors such as falling oil prices, improving profit margins for MSMEs and increased rural construction activity amid rising wages have helped mitigate the strong K-shaped phenomenon.

On the other hand, Professor Santosh Mehrotra of JNU argues that India's growth for decades has been inherently unfair.

He points to the government's lack of information on the vast majority of companies and highlights that many unorganized sector workers, still recovering from demonetization, have moved into agriculture without returning.

Inadequate construction job growth is further complicating efforts to divert workers from agriculture, he added.