How India’s capital-intensive growth is exacerbating income inequality

India has witnessed remarkable economic growth over the past few decades, yet this prosperity has been accompanied by a disturbing rise in inequality. A recent study from the World Inequality Database co-authored by Thomas Piketty and others shows inequality has skyrocketed since the early 2000s and in 2022-’23, India’s richest 10% citizens’ share of total income was close to 60%, and the share of the richest 1% was 22.6%. The bottom 50% were getting only 15% of India’s national income in 2022-’23.

The study further notes that the income share of India’s top 1% is not only highest since 1922 but also among the very highest in the world, higher than even South Africa, Brazil and the US. Caste, gender and regional divides further compound the problem, with marginalised communities continuing to face severe economic disadvantages.

While multiple factors have contributed to rising inequality, one of the most significant is India’s shift toward capital-intensive growth. Driven by the rapid rise of automation worldwide, capital-intensive industries – banking, financial services and insurance, technology and pharmaceuticals – have increasingly turned to automation, computerisation and advanced digital technologies to boost productivity and cut costs.

According to the Future of Jobs report 2025 by World Economic Forum, Indian firms are adopting AI, robotics...

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