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India’s rise to 4th largest economy belies per capita reality

GDP Growth vs. Per Capita Reality

  • India is set to become the 4th largest economy by 2025, overtaking Japan, as per IMF projections.
  • However, absolute GDP figures do not reflect income distribution, living standards, or development.
  • GDP per capita (a better measure of individual prosperity) is 12 times lower in India than in Japan, and 9 times lower than in Poland, despite India’s much larger GDP.

Relevance : GS 3(Indian Economy)

Structural Transformation of the Workforce

  • India (2023): ~45% of the workforce still in agriculture — a sign of underdevelopment.
  • Poland and Japan: Less than 10% in agriculture; high proportion in industry and services.
  • Lack of structural transformation hampers productivity and income growth in India.

Quality of Employment

  • Share of wage/salaried workers:
    • India: 23.9%
    • Japan: 91%
    • Poland: 80.1%
  • Low formal employment in India points to widespread informality, job insecurity, and lack of social protection.

Education Indicators

  • Gross enrolment rate in tertiary (college) education:
    • India: 32.7%
    • Japan: ~65%
    • Poland: ~75%
  • Lower higher education participation in India limits skilled workforce development and social mobility.

Health Indicators

  • Life Expectancy (2023):
    • India: 72 years
    • Japan: 84 years
    • Poland: 78.5 years
  • Infant Mortality Rate (IMR, per 1,000 live births):
    • India: 24.5
    • Japan and Poland: <5
  • India’s relatively poorer health outcomes reflect underinvestment in healthcare and service delivery gaps.

Human Development Index (HDI)

  • India (2023): HDI of 0.685 → Medium Human Development
  • Poland and Japan: HDI > 0.9 → Very High Human Development
  • HDI captures the multi-dimensional gaps India still faces despite economic size.

Conclusion

  • India’s economic rise is impressive in scale but masks deeper developmental challenges.
  • A larger economy does not guarantee improved well-being unless growth is inclusive, employment-generating, and human-capital focused.
  • For meaningful progress, India must address inequality, education, healthcare, and job formalisation.

July 2025
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