Inequality, Inclusive Growth, and Reflections on the Indian Economy

Increase in income and wealth inequality across individuals and also in the levels of human development and deprivations in many parts of the world have received increasing attention among researchers and policy designers in recent years, and India is no exception to this tendency. Growth distribution linkage has been reflected upon by the Classical and Neo-classical economists, and a synoptic review of the issues related to inequality and economic development, including the theoretical and empirical validity of the inverted U hypothesis, have been made in Sect. 2 of the paper. In Sect. 2, we review the inequality development linkage in terms of the selected theoretical and empirical literature since the days of Classical economists, and explicate the analytical issues involved, including the important contributions of Thomas Piketty and his team at the World Inequality Lab. Sect. 3 examines critically the analytical frame of the inclusive growth paradigm of development and its implications for inequality mitigation, followed by Sect. 4 reflecting on the trends in inequality in India and the possible policy interventions to mitigate inequality and promote inclusivity in the growth process of the Indian economy. Section 5 concludes.