Growing GDP is like a rising tide, but data shows it is not lifting all boats. Upward mobility remains a mirage for the majority, as family privilege and connections matter more than talent and hard work.
India is poised to become the world’s third largest economy. Yet, behind the headlines about rising GDP lies a sobering truth: For most Indians, the economic status of their parents still defines their future. The promise that hard work and talent can shape one’s destiny is not the reality for many. This is not just the inequality of income, it is the inequality of opportunity.
Results from a survey 2020-21 estimate India’s intergenerational income elasticity (IGE) at 0.56. This means more than half of a parent’s income advantage or disadvantage — is passed on to their children. Such a high IGE implies that economic mobility remains severely constrained in India. Growth may lift the national average, but the benefits are unequally distributed.
POCKETS OF MOBILITY:
IGE figures vary sharply across India’s demographic and geographic landscape. Urban India, despite having better infra, schools and markets, shows lower mobility (IGE 0.57) than rural India (0.51). This reflects the deeply segmented nature of urban opportunities, where access to quality education, formal employment and social capital is largely inherited.
At state level, disparities are even more striking. Karnataka (0.75), Telangana (0.73) and Tamil Nadu (0.69) — some of India’s fastest growing states record among the highest IGE values. On the other hand, Punjab (0.18), Assam (0.18) and Haryana (0.15) show far greater mobility. The message is clear: Growth doesn’t guarantee opportunity unless it is inclusive and equitable.
DIE CASTE:
Scheduled Tribes (IGE 0.66) experience the most limited mobility, while General Category groups also s how high persistence (IGE0.62), indicating retention of inherited advantage. Scheduled Castes, at 0.51, fare slightly better — perhaps reflecting the slow gains from reservation policies and expanded access to education. Other Backward Classes (OBC’s) with 0.53 IGE lie in between.
Religious identity also plays a significant role. Muslims have the highest IGE (0.63) among all religious groups, pointing to continued marginalization in education, housing and employment. By contrast, SIkhs (0.24) show far higher mobility, possibly due to better access to community networks and enterprise.
LIMITS OF EDUCATION:
If education were the great leveler, we would expect low ICE across educated households. Data says otherwise. Illiterate households show the highest IGE (0.71) , but even among graduate-level households, IGE remains high at 0.60. This suggests that access to higher education does not guarantee better life chances, particularly when quality varies and social networks remains unequal.
The story is similar for occupational categories. Households dependent on unclassified or irregular income sources show the highest IGE (0.75) , indicating a trap of volatility and vulnerability. By contrasting, those engaged in non-agricultural self-employment (0.34) and non-agricultural labor (0.33) show higher mobility. These findings challenge the assumption that formal salaried jobs are always more enabling, and underscore the potential of the informal and entrepreneurial sectors when supported with the right policies.
BRICS PATTERN:
With an IGE of 0.56, India ranks among the least mobile economies — comparable to Brail (0.60-0.70) and South Africa (0.63-0.70), which suffer from deeply entrenched social divides. China’s IGE is estimated between 0.50 and 0.60, with internal migrants and rural populations experiencing the most stagnation. Economies like Indonesia (0.48) perform similarly to India, revealing common development hurdles.
In wealthier nations, mobility is still far from perfect. US, often mythologized as a land of opportunity, shows IGE between 0.40 and 0.50, reflecting racial and spatial divides. UK (0.35) performs somewhat better. But the real benchmarks are the Nordic countries (0.20-0.30), where universal education, robust welfare, and labor protections support upward mobility for all. These global comparisons confirm when Indian data already suggests: Economic growth does not automatically dismantle inequality of opportunity.
TO-DO LIST:
For India’s policymakers especially at institutions like Niti Aayog, finance industry, finance commission, and RBI — the implications are urgent.
- Mobility must be systematically tracked and measured. India needs to institutionalize retrospective modules, national surveys and develop a national mobility dashboard, disaggregated by caste, gender, religion and location.
- Policies must be tailored to the most immobile groups — particularly STs, Muslims, and families in volatile occupations. Investments in early childhood care, remedial education, skilling and urban inclusion must target these communities.
- Higher education reforms must focus on quality, and not just quantity. Graduates from marginalized backgrounds may have real pathways into secure employment, not just credentials.
- Informal and self-employed sectors, which show higher mobility potential need formal support — through credit, training, digital inclusion, and market access.
REAL TEST:
Mobility is not just a technical measure. It is a test of fairness, a mirror of justice, and a predictor of national cohesion. If a child’s future is shaped more by where they’re born than what they do, then India’s growth is not truly inclusive. As we approach 2047 and envision India@100, the question before us is simple: Are we building a society where effort, not inheritance, determines success?
