BENGALURU- The Indian economy is likely to remain the fastest-growing major one in coming years, but a majority of independent economists and policy experts polled by Reuters are not confident it will make any difference in narrowing stark economic inequality.
Despite over 8 percent economic growth last fiscal year and a roaring stock market in Mumbai that is easily one of the world’s most expensive, New Delhi still distributes free food grains to more than 800 million of its 1.4 billion people.
Prime Minister Narendra Modi, sworn in for a third term with the support of regional parties after a shock election where his Bharatiya Janata Party lost its sizeable majority in parliament, has retained most ministers from his second one.
Yet rising economic inequality – around its highest in decades – and high youth unemployment were widely reported as reasons for the electoral drubbing after securing sweeping victories in 2014 and 2019 on development and economic reform platforms.
A nearly 85 percent majority of development economists and policy experts, 43 out of 51, in a May 15-June 18 Reuters poll, said they were not confident economic inequality would significantly reduce over the next five years, including 21 who said they had no confidence at all.
Only six said they were confident and two said very confident. These are separate from private economists who regularly forecast economic data and interest rates.
“Acknowledging that it is a problem will be a good first step … Currently, reduction of economic inequality is not a policy objective of decision-makers,” said Reetika Khera, a development economist at the Indian Institute of Technology in New Delhi.
“Inequality is not something that will go away on its own … it needs proactive government interventions.”
Even for a developing economy, income inequality in India is too extreme, according to a March report from the World Inequality Lab.
