Answer

Introduction

A mere increase in GDP does not guarantee the economic freedom of the masses as it often masks structural imbalances and the concentration of wealth. While Real GDP is projected to grow at 7.4% in FY26 , such aggregate expansion fails to ensure “freedom” if the bottom quintiles remain trapped in low-productivity cycles, lacking the discretionary power to participate in the broader economy.

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The Widening Gap: India 1 (Consumer Class) vs. India 2 (Survival Class)

The divergence between these two Indias is characterized by a “K-shaped” trajectory where the upper tier thrives on asset inflation while the lower tier faces stagnant real wages.

• Discretionary Spending Polarization: The ‘Consumer Class’ (Top 10%) drives 66% of all discretionary spending, while the ‘Survival Class’ is restricted to essential commodities.
  Eg: High-end premium goods, like luxury cars and ₹1 crore+ apartments, saw record growth in 2025, while sales of entry-level two-wheelers remained below 2019 levels.
• Income and Wealth Concentration: Economic gains are increasingly captured by the elite, leaving the majority with a shrinking share of the national pie.
  Eg: The World Inequality Report 2026 reveals that the top 1% of Indians hold nearly 40% of total wealth, while the bottom 50% receive only 15% of national income.
• Sectoral Growth Mismatch: The capital-intensive services sector (India 1) is growing at 9.1%, whereas the labor-intensive agricultural sector (India 2) has slowed to 3.1%.
• Vanishing Middle-Tier Markets: Corporations are shifting focus toward “high-margin” luxury segments, effectively ignoring the volume-driven “affordable” market needed by the masses.
  Eg: Real estate developers are increasingly pivoting from affordable housing to luxury gated communities to maintain profitability.

Issues Arising from This Widening Gap

• Reduced Social Mobility: Extreme wealth gaps entrench unequal access to quality health and education, locking the ‘Survival Class’ into intergenerational disadvantage.
• Erosion of Institutional Trust: When economic power translates into political influence, the masses may perceive democratic institutions as being “captured” by elite interests.
• Vulnerability to Shocks: India 2 lacks a financial buffer, making them disproportionately vulnerable to inflation or climate-related disasters compared to the asset-rich India 1.
• Stagnant Real Wages: Inflation often outpaces the nominal wage growth of manual and entry-level workers, leading to a decline in their actual purchasing power.
  Eg: Entry-level IT and factory wages have remained largely stagnant over the last decade (2012–2026) despite a quadrupling of the cost of living.

Policy Measures for True Inclusive Growth

• Progressive Wealth Taxation: Implementing targeted taxes on the ultra-rich to fund public goods like universal healthcare and high-quality schooling.
  Eg: The World Inequality Report 2026 recommends strengthening progressive taxation to mobilize resources for redistributive social protection.
• Revitalizing the Care Economy: Investing in affordable childcare and elderly care to unlock the human capital of women, whose labor participation remains low.
  Eg: Direct public investment of 2% of GDP in the care sector could potentially generate 11 million jobs in India.
• Wage-Inflation Indexation: Legislating mandatory inflation-linked wage adjustments for formal and informal labor to protect the real income of the masses.
• Decentralized Industrialization: Promoting MSMEs and rural “food-processing clusters” to create non-farm employment in the hinterland.
  Eg: The Gramin Ajeevika Mission 2025 aims to integrate rural labor with high-value manufacturing supply chains.

Conclusion

Economic freedom is not just about a rising GDP but the elimination of coercive power from the market and the empowerment of every citizen to lead a dignified life. For India to achieve its Viksit Bharat 2047 vision, the focus must shift from “Headline GDP” to Quality of Life metrics. True prosperity is attained only when growth is not just fast, but also fair, ensuring that “India 1” does not outpace “India 2” beyond the point of social cohesion.

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