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India’s Economic and Social Progress


India is the second-most populous country in the world. Its population is over 1.3 billion people, which makes the state the biggest democracy in the world.1 According to the United Nations, India will have the largest population in the world by 2028.2 Its area is 1.2 million square miles, and major religions are Hinduism, Islam, Christianity, Sikhism, and Buddhism.3 As it is a nuclear-powered state, and the economy of the country is rapidly developing, India has become one of the most significant powers in the region.4 Even though the economic its indicators are still considerably lower than in developed countries, India is a country of the increased interest of economist around the world.

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India is a country of controversies since it is the home of the oldest tradition and the most recent innovations. It is home to one of the world’s oldest religions that are based on the Sanskrit scripts. India still has the caste system, which is one of the world’s oldest social stratifications, which was shaped approximately 3,000 years ago.5 At the same time, Bangalore, one of the largest cities in India, has become a hub for the global software business, and developers from around the globe often choose India as the country in which they want to live.6The controversies influence the economic development of the country, making it unstable. The present paper offers an overview of the country’s characteristics and describes factors that facilitate and obstruct economic and social progress during the last three decades.


Population Structure

The population in India is one of the fastest-growing in the world. Figure 1 represents the historical and projected population change in India for the period between 1950 and 2100. According to this graph, the population is expected to reach a peak of 1.6 billion in 2060. However, the growth of the population is attributed to having a historically large population due to the fertility of the lands. Additionally, the population is growing due to child marriages, lack of education in women, the presence of 60% of the younger population, and migration.7 These characteristics are attributed to the social structure of the country.

As mentioned above, India has preserved a 3,000-year-old caste system that can be both advantageous and dysfunctional for the country. A caste is a hereditary class of Hindu society that determines the occupation of a person in India. There are castes in the Indian culture, which are brahmins (teachers, priests, and scientists), Kshatriyas (warriors and rulers), vaishyas (farmers, traders, and merchants), and Shudras (laborers).8 There are also Dalits, or untouchables, which are outcasts of the Indian social system, and they work as street sweepers or latrine cleaners. The social system welcomes arranged marriages and resists the education of women, which facilitates the growth of the population.

Indian Population.
Figure 1. Indian Population.

Income Growth

India is one of the world’s most rapidly developing economies in the world. According to the India Times, the country has the second-fastest growing economy at the rate of 6%.10 GDP is also growing exponentially; in 2018, it was estimated to be $2.726 trillion, while it was $468.395 billion and $1.676 trillion in 2000 and 2010 correspondingly.11 In 2018, Gross National Income (GNI) per capita was $2,020, meaning that it has more than doubled since 2008.12 However, despite the optimistic statistics, economic growth is considerably slower than in 2018, which was 8.1%.13 Therefore, other indexes may also fall in 2019.

Changes in Development Indicators

In recent years, India has shown considerable progress in terms of human development indicators (HDI). According to Shandra and Bera, the country has climbed one rank in HDI in 2018, and now it is ranked 130 with a value of 0.640.14 HDI is a composite index assessing progress in three basic dimensions of human development: mean years of education, life expectancy, and per capita gross national income. India has demonstrated improvement in all the spheres if compared to numbers 30 years ago. Since 1990, India’s life expectancy has grown by 11 years, and it is now 68.8 years.15 There are more significant changes in education levels since the expected years of schooling have increased from 7.6 in 1990, to 12.3 in 2018.16 GNI has also increased by 266% percent in 30 years, demonstrating a steady improvement in the sphere. In short, India’s HDI is steadily growing.

The primary strategy of improving the index is through the unification of a reformation of education and healthcare systems. Indian Prime Minister, Narendra Modi, holds a vision of development for all and the fundamental principles of the Sustainable Development Goals, which aims at leaving no one behind and providing.17 However, there are considerable limitations to the growth of the index. In particular, women remain significantly less politically, economically, and socially empowered than men. According to Shandra and Bera, “Female participation in the labour market is 27.2 % compared to 78.8% for men.”18 Moreover, only 39% of females in India reached at least a secondary level of education in comparison to 64% of males.19 In other words, inequality remains a major concern for India’s performance measured by HDI.

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Social Indicators

Despite the positive changes in HDI, India is still lagging in major social indicators. One of the major concerns is the healthcare system in India. The reports show that maternal mortality rates and infant mortality rates, which are the primary ways to measure the performance of healthcare, are lower than in Sri Lanka, Maldives, Iran, Bhutan, and Nepal.20 On the one hand, it may be argued that the country does not have enough money to provide universal healthcare. On the other hand, the cost of labor in the country is considerably lower than in the developed countries, and the rapid growth of GDP and GDI shows that the company seems to be able to afford a better healthcare system. Additionally, some Indian states, including Kerala, Tamil Nadu, and Himachal Pradesh, are very close to providing universal healthcare.21 Therefore, the reasons for healthcare issues in India remain debatable.

The education system is also a matter of concern for India. Even though it has improved considerably in the last 30 years, it is still underperforming. For instance, the literacy rate among children under 15 is as low as 62.8%, while Iran has 84.3%, the Maldives have 98.4%, and Sri Lanka has 91.2%.22 The problem is primarily due to inequality between males and females since girls usually do not receive a formal education.

Inequality can also be considered a major issue for the country. The labor force participation rate in India is 53.8%, which may be regarded as rather low since the majority of the population is of a younger age.23 The low percentage is connected with the low labor force participation rate among women 27.2%24 Additionally, India offers low-quality jobs since the majority of them (77.5%) are considered vulnerable employment, and 42.7% of the workforce is employed in agriculture.25 Moreover, only 24.1% of the older population are pension recipients. In short, it may be stated that social indicators are considerably below the world average.

Poverty and Inequality Trends

The situation with poverty in India has improved considerably in the past 30 years. The number of working poor at purchasing power parity (PPP) of $3.1 a day is twice as low in comparison with 1990.26 However, the working poor index is still high at 42.9% with more than 364 million people living in multidimensional poverty.27 At the same time, 19.1% of the Indian population is considered vulnerable to multidimensional poverty.28 However, despite the poor statistics introduced above, the situation with poverty in India is improving at all levels.

Inequality is one of the central problems that Indian society faces. As has been described above, women are severely underrepresented in the workforce, and they are less likely to receive an education. Moreover, the United Nations Development Programme reports that women’s share of employment in non-agriculture is 18.6%.29 The situation is even worse in parliament, where only 11.6% of seats are taken by females.30 Therefore, it may be stated that India is a country of severe gender inequality.


Economic Progress

The primary factor that drives the economy of the country forward is a fast-growing working-age population. Figure 2 demonstrates that more than 60% of the people are below 35, which is associated with the rise of a flexible workforce that can help to develop the economy of the country. According to Riley, “India is experiencing demographic transition that has increased the share of the working-age population from 58 percent to 64 percent over the last two decades.”31 However, as the population will become older, it may become a burden to the economy due to the problems with retirement.

Indian Population by Age.
Figure 2. Indian Population by Age.

Wage costs are low in India, which has helped to close some of the productivity gaps between India and other countries in later stages of development. A cheap workforce can help to improve the situation in any economic sector without considerable investments in human resources from the government. Additionally, low wages attract in combination with increased numbers of English speakers allowed more investments from companies that wish to outsource some of their functions. For instance, it has become a home for many call centers and IT departments of western countries.33 Without the prevalence of a younger population who can speak English who can be hired for moderate pay, such investments would be impossible. Due to these factors, India has successfully developed highly advanced and attractive clusters of businesses in the technology space.34 Bangalore is a vivid example of the situation, as it has become one of the most attractive places for software engineers around the globe. In other words, India has followed the path of development of many other countries, as it went from the agricultural industry to service provision.

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There several factors that limit the economic growth of the country. First, the poor performance of the education system leads to low productivity and weak human capital. The problem is that even though the workforce is large, it primarily consists of low-skilled workers. Second, India’s infrastructure is poorly developed, which makes it less attractive to large-scale industries. According to Riley, the cost of energy in India is very high, and supplies are regular, which can lead to power blackouts and loss of productivity.35 Additionally, poor infrastructure may negatively affect the tourism business in the country.

Third, the majority of the population lives in rural areas, which, in combination with poor infrastructure, interferes with the ability of enterprises to get access to the needed workforce. However, since India has not yet seen the rapid urbanization experienced in other nations, it can become one of the events that may positively affect India’s economy in the future. Despite the substantial prevalence of agriculture, India failed to reach productivity growth in the sector, which prevented people from moving to big cities.36 According to Financial Times, “India’s failure to adopt enough of the large-scale, labour-intensive manufacturing that has propelled the successful development of China and other east Asian countries is now regarded as one of the greatest weaknesses of the Indian economy.”37 In short, India needs to invest in the agricultural sector, infrastructure, and manufacturing to stabilize economic growth.

Social Progress

The economic growth has also been slowed by the social structure, which is more than 3000 years old. While the system is not as influential in the cities, rural communities have long been arranged based on castes. Outside the cities, the upper class usually lives in segregated colonies, the water wells are not shared, and everyone could marry only inside one’s caste.38 Even though the system is considered unjust by many people around the globe, it has remained unchanged, preventing people from getting the position they deserve. In 1950, discrimination based on castes had become illegal, and quotas in governmental and educational jobs for different castes were introduced.39 However, there is an opinion that the caste system would have disappeared; however, politicians often use it to gather votes.40 In brief, the caste system is one of the reasons for slow social progress in the country.

Another matter that influences the social processes in India is the strong institution of the family. It can be seen as both an advantage and a disadvantage. On the one hand, Indian families are a source of emotional and financial support for all the members, including extended family.41 Therefore, the misfortunes suffered by people living below the poverty line may be diminished by the support of relatives. Families also care for the elderly, and thus the government is not pressured to pay pensions. Even though it is a poor social index, the saved money can be invested in the development of other spheres. Additionally, healthy families usually mean high birth rates, which is considered as one of the advantages of the Indian economy.

On the other hand, patriarchal families usually support gender roles and limit the gender diversification of the workforce. In traditional Indian families, women typically do not work or receive an education.42 Females are seen as mothers and homemakers, who are to bring up the children, cook, and clean the house. Due to this tradition, India’s progress in fighting inequality has been a failure so far. As a result, women are underrepresented in the workforce and government. Urbanization and globalization influence the traditional views on the institution of the family, and young adults begin to restructure society in accordance with western values. However, it is unclear if the situation will change in the nearest future.


India is a country of controversy in both economic and social structures. It is a home of the oldest tradition and latest innovation at the same time. India has a large young workforce that is of high interest to western investors due to low wages and the knowledge of English. However, this workforce is low-skilled and sometimes cannot get too big cities due to poor infrastructure. Economic growth is the second highest in the world, and GDI has doubled during the previous five years. At the same time, there are hundreds of millions of people living below the poverty line. Due to the reformation of the education system, more people have access to high-quality education. Yet, less than a third of women have an education higher than secondary. The process of urbanization has led to the emergence of young specialists with advanced thought. Still, the caste system and strong family bonds interfere with the progress of society. All these controversies can explain the inconsistency and unsteadiness of Indian economic and social progress.


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