It maybe the best of times, but it is surely the worst of times
Dr Manmohan Singh, former PM and finance minister who launched India’s 1991 economic reforms, died last week. He earned the media’s glowing tributes. He was extraordinary, creating prosperity for the middle class—who later turned against him. Yet he remained constrained by his party’s dynastic politics.
Though his life held many accomplishments, his legacy centres on the 1991 liberalisation. For 34 years, these reforms have been celebrated as transformative. But questions remain about their true impact. While they freed India from socialist-era restrictions that had hampered growth, it’s debatable whether the benefits reached all segments of society or just certain classes.
The human development index of India in 1991 was 0.433 and in 2024, it is estimated to be 0.644. This is an impressive growth. However, the devil is in the detail. In 1991, Indian rank was 114, and in 2024 it is 134. It means that though India has improved, most other countries have improved more in the same period, so much so that, we have slipped in relative rank. India’s rank in the gender inequality index was 142 in 1991. In 2024, it is 129 out of 146 countries. Though we have marginally improved, we still remain at the bottom rungs in gender equality. The income inequality that has resulted in these 34 years is mind-boggling.
According to the 2024 World Inequality Lab report, the top one per cent of Indians own 22.6 per cent of income, while the top 10 per cent own 57.7 per cent. In contrast, the bottom 50 per cent earn only 15 per cent of income. The top one per cent has an annual per capita income of Rs 53 lakh, while the bottom 50 per cent have Rs 71,163 (831 USD) per annum, placing half of India’s population below most of Sub-Saharan Africa.
This means around 70 crore people in India are extremely poor, more than the population of any country, except China. Despite claims of superpower status, the poverty is evident. In terms of wealth, the top one per cent holds 40.1 per cent, the top 10 per cent hold 65 per cent, while the bottom 50 per cent holds just 6.4 per cent. This is the highest inequality level since 1922. The impact of economic reforms on the bottom 50 per cent is often ignored.
When it comes to healthcare, the figures are scarier. Quoting the latest Oxfam report, the global average for life expectancy is 72.6 years, but India (69.42) remains below the global average. It is also lower than the neighbouring countries—Nepal (70.8), Bhutan (71.8), Bangladesh (72.6), and Sri Lanka (77)—and its BRICS counterparts, Brazil (75.9), China (76.9), and Russia (72.6). Similarly, access to healthcare has improved from a rank of 153 in 1990 to 145 in 2016 (last measured) but is lower than Bangladesh (132), Sri Lanka (71), Bhutan (134) and its BRICS countries, Brazil (96), Russia (58), China and South Africa (127). Note that even in areas where there is an improvement in ranks, it is mostly marginal.
Medical costs have soared as government withdrawal left healthcare to private providers. One serious illness can push middle-class families into poverty. Education costs have surged past middle-class means since 1991, with professional degrees now requiring crushing loans, unlike the nearly free government education of the 1990s.
Economic reforms have benefited a few Indians while worsening conditions for most. While a small elite enjoys extravagant lifestyles and billion-dollar weddings, the majority suffers under stagnant wages and rising costs. Rich or poor alike must endure polluted air, contaminated water, and crumbling infrastructure that makes daily life a struggle. Traffic-choked roads, unreliable power supply, and sewage-filled streets plague both luxury highrises and humble settlements. This shared misery, born of corruption and inefficiency, serves as an ironic equaliser in a society increasingly divided by wealth.
Maybe it is time for another course correction. We have produced enough billionaires. The trickle-down theory of wealth has never worked and never will. It is time to take care of the bottom 50 per cent, too, before it is too late.
If anyone is dreaming that such a skewed sharing of wealth is sustainable in the long run, they are being ignorant of history. As Dickens put it in The Tale of Two Cities: It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way. To put it in context, the classic tale is set during the time of the French Revolution.
Anand Neelakantan
Author of Asura, Ajaya series, Vanara and Bahubali trilogy
mail@asura.co.in