The Myth of India’s Economic Rise: A 7.8% Growth that Masks Disparities, Unemployment, and Corruption

India’s economy recently grew by 7.8% in the first quarter of fiscal year 2025-26, marking the highest growth in five quarters. This growth has been praised as a step toward India becoming the third-largest economy globally, surpassing Japan. However, the true picture of India’s economy is more complicated than these headline figures suggest. While the growth numbers seem impressive, they obscure a range of challenges, including wealth inequality, unemployment, and ongoing social issues. A deeper look reveals that India’s economic growth is built on fragile foundations and uneven benefits.

Economic Growth and Wealth Gaps

India’s status as the fifth-largest economy is celebrated, but this figure hides the reality of severe wealth inequality. The wealth of India is largely concentrated in the hands of a small percentage of the population, with the top 1% owning about 73% of the country’s total wealth. On the other hand, millions of people live on minimal incomes, depending on government rations to survive. Though extreme poverty has dropped from 16.2% in 2011-12 to around 2.3% in 2022-23, a large portion of the population still lives near the poverty line. The benefits of economic growth are not reaching all Indians equally.

• Wealth Inequality: The rich are getting richer, while millions remain poor.
• Rural Poverty: A large number of rural residents still live in poverty, relying on agriculture with minimal support from the government.

High Unemployment and Underemployment

India’s GDP growth figures may seem impressive, but they mask a serious unemployment crisis. The overall unemployment rate stands at about 5.1%-5.6%, with urban unemployment significantly higher at 6.5%-7.1%. The situation for young people is particularly troubling, with youth unemployment ranging from 13.8% to 19% in different reports. Many educated youth struggle to find formal jobs, which leads them to take low-paying, informal jobs such as taxi driving and food delivery. These jobs offer no job security and poor working conditions.

• Youth Unemployment: Many educated young people cannot find proper jobs.
• Informal Sector Jobs: A significant portion of the workforce is stuck in low-paying, insecure jobs.

Despite strong GDP growth, many young people remain unemployed or underemployed, revealing a “silent crisis” in India’s job market.

Agriculture and Rural Problems

A large section of India’s population still relies on agriculture, but farmers face many problems, including rising debts, rising costs, and lack of adequate government support. Many farmers are stuck in a cycle of debt and struggle to earn a decent living. Farmer protests have become increasingly common, as they demand better support. These issues reflect the continued distress in India’s rural areas, where the economy remains stagnant, and farmers are not getting the help they need.

• Rural Issues: Farmers are dealing with high debts and increasing costs, making it difficult for them to survive.
• Farmer Protests: Protests from farmers highlight the ongoing problems in the agricultural sector.

Corruption and Governance Problems

Corruption remains a significant issue in India, with the country ranking 96th out of 180 countries in the 2025 Corruption Perceptions Index. Corruption slows down government efficiency and prevents resources from reaching the people who need them most. There are also concerns about the accuracy of India’s economic data. Delays in reports and questionable methods of presenting information create a distorted view of the country’s economic performance, making it difficult for the public to understand the full picture.

• Corruption: Corruption continues to undermine governance and waste public resources.
• Lack of Transparency: Delayed and unreliable reports make it hard to assess India’s true economic situation.

Limited Media Freedom and Transparency

India ranks 151st out of 180 in the 2025 World Press Freedom Index, a sign of the growing restrictions on media freedom. This limits the public’s ability to freely discuss and assess important economic and political issues. Government interference in the media means that critical voices are often silenced, preventing a full understanding of the country’s real challenges.

• Media Restrictions: Media freedom is heavily restricted, limiting public access to information.
• Government Influence on Media: The media is often controlled by the government, making it difficult for citizens to get unbiased information.

Environmental and Social Issues

India’s rapid growth has come at the cost of the environment. Cities like Delhi are among the most polluted in the world, causing serious health problems for millions of people. Pollution, poor waste management, and limited access to clean water continue to affect millions, especially in urban areas. These environmental issues are contributing to rising public health costs and lowering quality of life.

• Pollution: India’s urban areas, especially Delhi, face extreme pollution levels.
• Environmental Damage: The rapid pace of industrial growth is damaging the environment and public health.

India also faces serious social issues. Women’s safety remains a major concern, with 40% of women in urban areas feeling unsafe in public spaces. Despite laws banning child labor, millions of children continue to work in dangerous conditions, limiting their chances of a better future.

• Women’s Safety: A large number of women feel unsafe in public spaces.
• Child Labor: Millions of children are still working in harmful conditions, undermining their rights.

Healthcare and Education Shortcomings

India’s healthcare system remains inadequate, with many rural areas lacking even basic medical facilities. This leads to preventable deaths and widespread health problems. The education system also faces numerous challenges, including overcrowded classrooms, poor infrastructure, and a lack of trained teachers. These problems prevent millions of children from receiving a quality education and limit the country’s overall development.

• Healthcare Access: Many parts of rural India still lack access to essential healthcare services.
• Educational Inequalities: The education system continues to struggle with overcrowding and inadequate resources.

Conclusion: The Need for Structural Reform

India’s 7.8% GDP growth in the first quarter of fiscal 2025-26 is certainly an achievement, but it hides deeper issues that need urgent attention. Unemployment, wealth inequality, corruption, poor social indicators, and environmental problems continue to hold back India’s potential. While growth figures are important, they are built on shaky foundations that fail to address the pressing problems of the Indian population. For India to truly fulfill its economic aspirations, it must address these challenges and implement reforms to ensure that the benefits of growth reach all sections of society. Only then can the country achieve real, sustainable progress and improve the living standards of all its citizens.