Analysing India’s Cycle of Deprivation and Affluence
Context
- India’s economic journey between 2014–2025 shows both growth and inequality. While economic expansion and poverty reduction are highlighted, income mobility data shows rising downward mobility and uneven opportunities across caste, religion and regions. This reflects coexistence of prosperity and deprivation.
Background
India’s growth in the last decade was supported by:
- Infrastructure development
- Financial inclusion
- Welfare schemes
However, inclusive growth was limited due to:
- Informal employment
- Agricultural distress
- Regional inequality
- Poor access to education and healthcare
Income mobility analysis shows economic vulnerability better than poverty data.
Income Mobility
- Income mobility means movement of households between income groups over time.
Types:
- Upward mobility – economic improvement
- Downward mobility – economic decline
- Static mobility – no change
Income Groups
| Group | Population Share |
| Top Group | Top 10% |
| Middle Group | Next 40% |
| Lower Group | Bottom 50% |
- Mobility is measured using 2014 income levels as the base.
Key Trends
- India shows more downward mobility than upward mobility.
| Indicator | 2015 | 2025 |
| Downward Mobility | 14% | 26.8% |
| Upward Mobility | 14.1% | 23.5% |
| Same Income Group | >70% | <50% |
Rural–Urban Divide
- Rural households faced greater decline than urban households.
| Indicator | Rural | Urban |
| Downward Mobility | Higher (~29%) | Lower |
| Upward Mobility | Lower | Higher |
| Main Jobs | Agriculture & informal | Services & formal |
Reasons
- Agricultural dependence
- Climate risks
- Informal employment
- Low diversification
Social Inequality
Caste
| Group | Mobility Trend |
| Unreserved | Better mobility |
| OBC | Mixed |
| SC | Limited mobility |
| ST | Mixed |
- Reasons:
- Low assets
- Poor education access
- Occupational barriers
Major Economic Shocks
- After 2019, mobility slowed due to:
- Economic slowdown
- COVID-19 pandemic
Effects:
- Job losses
- Reverse migration
- Income shocks
- Business closures
Implications
Economic
- Growth without inclusion
- Rising inequality
- Weak demand
Social
- Reduced opportunities
- Youth frustration
- Social tensions
Policy
- Need for jobs
- Strong social protection
- Inclusive growth
Way Forward
- Promote labour-intensive industries
- Support MSMEs
- Expand social security
- Improve education and skills
- Strengthen rural economy
Conclusion
- India’s growth between 2014–2025 shows both prosperity and vulnerability. Rising downward mobility, especially in rural and disadvantaged groups, highlights the need for inclusive growth and stronger social protection.
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