India Becomes the 4th Largest Economy: But Who’s Actually Rising With It?
India has just claimed a monumental spot on the global stage, overtaking Japan to become the 4th largest economy in the world by nominal GDP in 2025. With a GDP crossing $4 trillion, this milestone has sparked celebrations, headlines, and a wave of national pride. It’s a testament to India’s economic momentum, driven by robust domestic consumption, strategic reforms, and a growing global presence. But beyond the glittering numbers and boardroom cheers, a critical question looms: Who is truly rising with this growth? Is this economic surge translating into better lives for the average Indian—or is it a victory reserved for the few?
Let’s peel back the layers of this achievement and dive into what it really means for the 1.4 billion people who call India home. From jobs to happiness, health to inequality, let's unpack the story with data, insights, and a hard look at the ground realities.
A Milestone Worth Celebrating—But For Whom?
India’s rise to the 4th largest economy is no small feat. According to the International Monetary Fund (IMF), India’s nominal GDP in 2025 stands at $4.187 trillion, edging past Japan’s $4.06 trillion. This growth has been fueled by a mix of traditional and modern sectors—agriculture, technology services, business outsourcing, and manufacturing—making India a diversified economic powerhouse. The country’s ascent reflects its increasing global influence, with its share of the world economy (in purchasing power parity terms) rising from 4% in 2000 to 7.5% in 2023, and projected to hit 10% by 2030.
This milestone promises a lot:
🔸 More Jobs (Hopefully Better Ones): A growing economy often means more employment opportunities, especially in sectors like IT, manufacturing, and services.
🔸 Improved Infrastructure: The government’s focus on infrastructure—evidenced by 54,000 km of national highways built between 2014 and 2024—could ease daily life and boost connectivity.
🔸 Increased Social Spending: If prioritized, this growth could lead to more investment in healthcare, education, and social welfare, addressing long-standing gaps.
🔸 Rising Aspirations, Real Opportunities: A larger economy could inspire innovation, entrepreneurship, and a better quality of life for millions.
But here’s the catch: while the macro numbers look shiny, the micro realities tell a different story. For the 90% of Indians who aren’t part of the elite, this growth often feels like a distant dream. Are we healthier? Happier? More secure? Let’s break it down with data and see who’s really benefiting.
The Winners: The Top 10% Are Thriving
Let’s start with the obvious beneficiaries: the wealthy. India’s economic growth has disproportionately favored the top tier of society, and the numbers are stark. According to the World Inequality Lab’s 2023 report, the top 1% of Indians earned 22.6% of the national income in 2022—the highest share since pre-independence times. Meanwhile, the top 10% hold nearly 57% of total income, and their wealth share is even more skewed, with the richest 1% owning over 40% of the nation’s total wealth. The bottom 50%? They scrape by with just 13% of the income and a mere 3% of the wealth.
This isn’t a new trend—it’s been worsening for decades. The number of Indian billionaires surged from 102 in 2020 to 166 in 2022, with their fortunes multiplying, especially during the pandemic. For instance, the Oxfam India 2023 report notes that the wealth of the top 10% rose from 44.9% to 64.6% between 1961 and 2023. The rich aren’t just getting richer—they’re doing so at a pace that leaves the rest of the country in the dust. This “Billionaire Raj,” as termed by economist Thomas Piketty, places India among the most unequal nations globally, surpassing even South Africa and Brazil in income concentration.
The Strugglers: The Bottom 90% Are Left Behind
Now, let’s look at the other side of the coin—the bottom 90%, who make up the vast majority of India’s population. For them, the $4 trillion economy feels more like a statistic than a reality. Here’s why:
- Stagnant Wages: Real wage growth for most Indians has been near 0% over the last decade. For the 80% of the workforce in the informal sector—think daily wage laborers, street vendors, and small farmers—economic growth hasn’t translated into better pay. These workers remain vulnerable, underpaid, and largely outside social protection nets, with little access to benefits like pensions or healthcare.
- Jobless Growth: Despite the GDP boom, employment creation lags. The unemployment rate hovers around 7%, with underemployment rampant in rural areas. The International Labour Organization reports that the share of educated youth among the unemployed rose from 54.2% in 2000 to 65.7% in 2022. Stories of desperation are common—like thousands lining up in Lucknow in 2024 to take construction jobs in Israel, risking their lives for a paycheck.
- Economic Distress: The India Employment Report 2024 highlights that economic distress masks the true state of employment. The urban unemployment rate may have dipped to 6.4% in 2024, but the quality of jobs remains poor. Many are stuck in low-paying, unstable gig work, with no safety net to fall back on.
For the average Indian, the promise of “more jobs, hopefully better ones” feels hollow when the reality is fierce competition—like the 1.08 crore applicants for just 32,438 RRB Group D posts, a 320:1 ratio. This isn’t opportunity; it’s a survival scramble.
GDP vs. Per Capita Income: The Great Divide
India’s GDP may be $4 trillion, but divide that by its 1.4 billion population, and the picture dims. India’s GDP per capita in 2023 was around $2,485, rising to about $2,880 in 2025 based on IMF projections. Compare that to:
- China: ~$12,500
- Brazil: ~$10,000
- Global Average: ~$13,000
Despite being the 4th largest economy, India ranks 136th in GDP per capita globally. This gap reveals a harsh truth: the average Indian sees very little of the country’s economic growth. While the elite enjoy the fruits of a $4 trillion economy, the majority struggle to afford basic needs. A low per capita income directly impacts access to quality healthcare, education, and housing, perpetuating cycles of poverty for millions.
GDP vs. Happiness: Are We Smiling Yet?
Economic growth is often touted as a path to better lives, but does it make us happier? According to the 2024 World Happiness Report, India ranks 126th out of 143 countries, a slight drop from 125th the previous year. This places India behind conflict-affected areas like Palestine and Ukraine, and even neighbors like Pakistan and Nepal. Nations with far smaller GDPs—like Bhutan, Costa Rica, and Uruguay—rank much higher, proving that happiness isn’t just about money.
What’s dragging India down? Inequality, job insecurity, poor work-life balance, and weak social support systems are major culprits. The report notes a “large and steady decline in life evaluation” and a “longer-term slide in Indian life evaluations,” reflecting a growing sense of dissatisfaction. For many Indians, the pressure to survive in a competitive, unequal society overshadows any sense of economic progress.
GDP vs. Living Standards: Progress, But Not Enough
On paper, India has made strides in improving living standards, but the gains are uneven:
- Electricity: Access is nearly universal, with 96% of villages electrified by 2024. But rural areas still face frequent outages, and quality remains a challenge.
- Water and Sanitation: About 30% of rural households lack access to clean tap water, and sanitation facilities are often inadequate.
- Housing: While programs like the Pradhan Mantri Awas Yojana delivered over 2 million units in 2024, millions still live in slums or substandard conditions.
Despite these improvements, living conditions remain fragile for a large portion of the population. The Global Multidimensional Poverty Index 2024 reports that 234 million Indians still live in acute poverty, a stark contrast to the country’s economic ranking.
Human Development Index: Lagging Behind Smaller Economies
The Human Development Index (HDI) measures a country’s progress in health, education, and standard of living. In 2023, India ranked 134th out of 193 countries with an HDI value of 0.644, placing it in the “medium human development” category. Here’s a snapshot:
- Life Expectancy: 67.7 years (up from 67.2 in 2021)
- Mean Years of Schooling: 6.57 years
- Expected Years of Schooling: 12.6 years
While India has improved since 1990 (HDI up by 48.4%), it still trails far behind smaller economies like Sri Lanka (HDI rank 73) or Vietnam (HDI rank 107). The gap in education and health outcomes highlights a critical disconnect: economic growth isn’t translating into human development for the majority.
GDP vs. Nutrition & Health: A Hungry Reality
India’s economic rise hasn’t solved its deep-rooted health and nutrition challenges. The 2024 Global Hunger Index gives India a score of 27.3, indicating a “serious” level of hunger. Key stats paint a grim picture:
- Undernourishment: 13.7% of the population—over 190 million people—don’t get enough calories.
- Child Wasting: 18.7% of children under five suffer from acute malnutrition, the highest rate globally.
- Child Stunting: 35.5% of children under five are stunted, reflecting chronic undernutrition.
- Child Mortality: 2.9% of children don’t survive to their fifth birthday, often due to hunger-related causes.
Healthcare access is another pain point. Out-of-pocket healthcare spending accounts for 48% of all health expenses in India, compared to a global average of 18%. This burden pushes around 63 million Indians into poverty each year. While the government has invested in health—such as the National Health Mission—the scale of the challenge remains daunting.
GDP vs. Mental Health: A Silent Crisis
Perhaps the most alarming disconnect between GDP and well-being is in mental health. In 2022, India recorded 171,000 suicides, the highest ever, according to government data submitted to the Supreme Court. That’s nearly 470 suicides per day. Who’s most affected?
- Daily Wage Earners and Homemakers: They made up nearly half of the victims, reflecting the crushing pressure of economic insecurity.
- Students: Over 13,000 student suicides were reported, the highest on record, driven by academic stress and lack of support systems.
This sharp rise in suicides shows that material growth isn’t alleviating psychological distress. If anything, the pressure to keep up in a fast-growing, competitive economy may be making things worse. The lack of mental health resources—India spends less than 1% of its health budget on mental health—compounds the crisis.
So, What Does Being the 4th Largest Economy Really Mean?
India’s rise to the 4th largest economy is a moment of immense potential. It gives the country leverage on the global stage, momentum to drive reforms, and resources to address long-standing challenges. But potential alone isn’t enough. Economic progress without human progress is like a glass palace built on sand—impressive to look at, but fragile under pressure.
Here’s the reality check:
- Inequality is at a 100-year high, with the top 1% reaping the lion’s share of growth.
- The bottom 90% struggle with stagnant wages, job insecurity, and limited access to basic services.
- Health, education, and happiness lag far behind what a $4 trillion economy should deliver.
- Mental health and social distress are worsening, not improving, with growth.
India’s economic story is one of contrasts—shiny skyscrapers and sprawling slums, billionaire wealth and widespread poverty, global ambition and local struggles. To truly rise together, India must turn its GDP growth into widespread access, equal opportunity, and real quality of life. That means:
- Investing in labor-intensive industries to create quality jobs for the masses.
- Strengthening social safety nets for informal workers and the poor.
- Prioritizing health and education spending to bridge human development gaps.
- Addressing inequality through progressive policies, like Oxfam’s suggestion of a 3% wealth tax on billionaires to fund public programs.
Final Thought: A Call to Rise Together
India’s $4 trillion milestone is a chance to rewrite the narrative—not just for the elite, but for every citizen. Economic growth is a powerful tool, but it’s only as meaningful as the lives it transforms. Until the bottom 90% can feel the benefits of this rise—through better wages, secure jobs, access to healthcare, and a sense of hope—India’s growth story will remain incomplete.
So, let’s celebrate the milestone, but let’s also ask the hard questions: Who are we growing for? And how do we ensure no one gets left behind? The answers to these questions will determine whether India’s rise as the 4th largest economy is just a number—or a true turning point for its people.
What matters more to you in measuring progress?
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GDP growth
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Job quality
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Healthcare & education access
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Happiness & well-being
