Column | Choosing Growth Over Equality Is a False, Dangerous Choice for India: Thomas Piketty and Economists at WIL

“… we are going to enter into a life of contradictions. In politics we will have equality and in social and economic life we will have inequality… We must remove this contradiction at the earliest possible moment or else those who suffer from inequality will blow up the structure of political democracy.”

—Dr B.R. Ambedkar, concluding speech to the Constituent Assembly, November 25, 1949

For weeks this summer, thousands of young Indians occupied Jantar Mantar in the heart of Delhi. Their irreverent, self-styled ‘Cockroach’ movement began over rigged and chaotic examinations and swelled into a national demand for educational reforms. On July 25 they claimed the resignation of the Union education minister. It was a reminder that India’s youth will not stay spectators to their own development—and that education, the surest ladder out of poverty, is where the republic has failed its young most visibly.

In 1947, India won independence and soon established political democracy—one person, one vote. Nearly eight decades later, the economy that democracy was meant to serve looks, by one measure, less equal today than under colonial rule. Our recent research published in the World Bank Economic Review finds that India’s top one per cent income share reached 23.3 per cent in 2022–23, the highest since income tax records began in 1922, and higher than at the peak of the British Raj. The top one per cent now own roughly 40 per cent of the country’s wealth. India’s concentration of income at the top is among the most extreme in the world. The ‘Billionaire Raj’, headed by India’s modern bourgeoisie, is now more unequal than the British Raj headed by the colonialist forces.

India has grown impressively in recent decades: real per-capita incomes have risen by about 3.6 per cent a year since 1990. But the gains were captured at the top. The Sensex rose more than 7,000 per cent; the number of dollar-billionaires exploded; billionaire wealth alone climbed from under one per cent of the national income in 1991 to around a quarter today. Meanwhile, the labour share of income in the corporate sector and organised manufacturing fell sharply, and 45 per cent of Indians remain stuck in agriculture. Real wages have stagnated over the past decade. Youth unemployment is high and the informal sector large. Intergenerational mobility remains low.

Confronted with such evidence on a range of inequalities, some commentators and economists argue that India must chase growth above all, and that worrying about the distribution is a luxury for rich countries. This is a misdiagnosis. Growth versus equality is a false choice—and for India, an increasingly dangerous one, as Ambedkar warned.

This concentration is not the price of growth. It is increasingly a brake on it. India still spends far too little on the foundations of a productive workforce. Central government health expenditure hovered around 1.4 per cent of the gross domestic product for the decade before Covid-19. Similarly, public education expenditure has been around 2.9 per cent—less than half of the six per cent target set in the government’s own National Education Policy. Recent research suggests educational inequality alone explains about a quarter of India’s wage gap, and human-capital investment may partly help explain India’s divergence from China. A country that leaves much of its workforce under-schooled and under-nourished cannot sustain high productivity, however many billionaires it mints.

The historical record confirms this. The economies that compressed inequality most in the 20th century—Western and Nordic Europe—were also among those that experienced the strongest productivity growth. Lower inequality did not kill growth, as we are sometimes told. More often it fuelled it, by fostering inclusive socio-economic institutions and boosting broad-based demand. India need not remain this unequal to grow. If anything, its inequality is likely now holding it back.

Extreme concentration does something else deeper, too. It concentrates power. When a few conglomerates and families come to shape markets, media and policy, democracy is hollowed out. Political equality on paper, economic oligarchy in practice.

So, the real question is not whether India grows—it will—but what kind of growth, and for whom. India needs strong broad-based growth for decades to lift hundreds of millions into genuine prosperity. But growth that flows to a sliver at the top, fails to create good jobs, and locks in a carbon-heavy path will neither last nor be shared.

Three priorities follow. First, tax the very top. Despite high wealth inequality and caste-reinforcing intergenerational transfers of wealth, India has no wealth or inheritance tax. These would dampen top-end inequality and generate crucial fiscal space for public investments in health, education and infrastructure. Even a modest package—a two per cent annual tax on net wealth above Rs 10 crore, plus a 33 per cent inheritance tax on the largest estates—would leave 99.96 per cent of Indians untouched, yet, raise around 2.7 per cent of the GDP a year; more ambitious versions could raise up to six per cent.

Second, spend it on people. The modest version of the tax package alone could nearly double India’s public education budget—funding the most reliable engine of long-run, broad-based growth. We show, in recent research published in the Journal of Public Economics, that human capital expenditure in public education and health strongly correlates with productivity growth, especially in low-income countries. Third, put jobs and wages at the centre of the growth agenda. Growth should be judged not solely by aggregate GDP figures but by its quality—whether it creates secure, well-paying jobs, lifts wages broadly and moves people out of low-productivity agriculture.

India’s choice mirrors a global one. In the Global Justice Report published in June 2026 by the World Inequality Lab, we show that compressing inequality—both between and within nations—is not merely compatible with prosperity for all but essential to reconciling it with a habitable planet. The wealth taxes that could fund India’s schools and clinics could, scaled globally, help finance a just climate transition.

None of this is anti-growth. Instead, it is a strategy to make growth faster, more durable and legitimate—and it is within reach. Independence gave India freedom; the Constitution gave every adult an equal vote. One of the key unfinished tasks of the republic is to give economic and social life the same democratic character.

(Views expressed are personal)

The authors are with the World Inequality Lab at the Paris School of Economics

(This story appeared in Outlook magazine’s August 31 issue, 'Whose Idea of India?', in which India’s noted public intellectuals, policymakers, cultural practitioners, political leaders, scholars and economists write in detail about the idea of India they believe can best secure the nation’s future as we celebrate 80 years of independence.)