India’s Development Paradox
Rising GDP, Lagging HDI
들어가기 앞서
본 글은 지난 대학교 2학년 1학기 당시 학교 과제로 제출한 'Country Report: India'라는 주제 중 'Economic Development and Urbanization'라는 글입니다. 작성한 원글 자체가 영어이기에 한국어로 번역할까 싶었으나 새로운 느낌으로, 영어로 발행하는 것도 좋은 시도일듯싶어 위와 같이 발행했습니다. 본 글은 세 가지 파트로 이루어져 있으니 잘 읽어주시면 감사하겠습니다.
P.s 본 필자는 현재 국방의 의무를 다하기 위해 군에 입대하여 향후 글 발행주기가 길어질 수 있습니다. 이점을 참고하여 주시기 바랍니다.
Economic Overview and Development Level
India is one of the largest and fastest-growing economies in the world. According to the World Bank, India’s GDP reached $3.57 trillion in 2023, placing it as the 5th largest economy globally in terms of nominal GDP. However, the question remains: Is this growth temporary?
[Source] World Bank Open Data. GDP growth (annual %) — IndiaThe chart shows India’s GDP growth rate over time. The country has maintained stable growth. Although there was a major contraction in 2020 due to COVID-19, with growth falling to -5.8%, the economy bounced back strongly in 2021, recording its highest growth rate in 12 years at 9.7%. India’s GDP growth is projected to reach 6.1% by Q3 2024, according to World Bank estimates. This rapid expansion has contributed to improving living standards and reducing extreme poverty. Still, GDP per capita remains relatively low, around $2,400 in 2022, mainly due to India’s large population and other structural factors. As a result, India is still classified as a lower-middle-income country.
A key factor behind this growth is strong domestic demand, supported by government policies to boost consumption, particularly for the middle class. India has set out a national vision, “Viksit Bharat,” with the goal of becoming a $30 trillion economy and joining the ranks of developed nations by 2047. One such policy includes tax cuts aimed at increasing consumer spending — specifically, raising the income tax exemption to ₹1.2 million per year. Though this may result in tax revenue losses of about ₹1 trillion, it is expected to be offset by the rise in consumer spending. Overall, it could increase GDP by around 0.6–0.7% and stimulate mid-term economic activity worth ₹6.7–7.9 trillion.
Despite this impressive economic performance, India still faces challenges in terms of human development. The Human Development Index (HDI), published annually by the UNDP, assesses progress based on literacy, life expectancy, and per capita income. As of 2022, India’s HDI score was 0.644, ranking 134th out of 193 countries. While there have been improvements in life expectancy and literacy, issues like healthcare access and continuity in education remain weak.
[Source] Computed by the authors • Map data: © OSM • Created with DatawrapperAlso, India shows large regional disparities. States like Goa, Kerala, and Delhi have high HDI scores of around 0.8, while states such as Bihar, Uttar Pradesh, and Jharkhand remain at mid-levels — comparable to regions in Sub-Saharan Africa. This inequality also appears in income distribution: the top 10% of the population owns about 75% of the nation’s total wealth. These disparities are seen not only across regions but also in access to healthcare, education, and income levels. Narrowing these gaps remains a key challenge for India’s future development.
Reference
Business Standard. (2025, May 24). Accelerated development key for Viksit Bharat: PM at NITI Governing Council. https://www.business-standard.com/economy/news/accelerated-development-key-for-viksit-bharat-pm-at-niti-governing-council-125052401488_1.html
Deloitte. (2025). India economic outlook. Deloitte Insights. https://www2.deloitte.com/us/en/insights/economy/asia-pacific/india-economic-outlook.html
Down To Earth. (n.d.). Subnational disparities: 70% of Indians in medium HDI category; mismatch with states’ economic growth. https://www.downtoearth.org.in/economy/subnational-disparities-70-indians-in-medium-human-development-category-mismatch-with-states-economic-growth
� This is Part 1 of the series “India’s Development Paradox: Growth, Inequality, and Urbanization.” In Part 2, we’ll explore India’s progress in food security and its dramatic structural transformation from agriculture to a service-led economy.
