‘Modi builds highways but where are our jobs?’: rising inequality looms over India’s election

It wasn’t even the real wedding, just the pre-wedding party. But that didn’t stop India’s richest billionaire, Mukesh Ambani, whose son is set to marry the daughter of a millionaire, from throwing an affair so ostentatious that no one could question just how wealthy they are.

The pop star Rihanna was paid about $8m to perform. The catering alone cost $25m and the final bill for the glittering soiree, held in March, reportedly came in at about $150m.

Super-rich magnates such as Ambani were once a rare breed in India but now their numbers are increasing at a record pace. Last year, there were 200 Indians on the Forbes billionaires list, the most ever. India’s financial and film metropolis of Mumbai just overtook Beijing to become Asia’s “billionaire capital”, behind only London and New York.

To some, this growing cohort of the super-rich shows India has become an economic success story in the past decade of Narendra Modi’s government. The country is now regularly described as the world’s fastest-growing economy, with GDP growth in 2023 pegged at 7.6%, far higher than that in most western countries.

Modi is seeking a third term in power by touting a narrative of prosperity and expansive welfare programmes that he claims have lifted millions out of poverty.

Surjit Bhalla, a pro-government economist, said the Modi government had “eliminated extreme poverty” in India. “I don’t think there’s ever been a period of economic growth of the Indian economy which was as robust as it is today,” he said

But much of this progress is a matter of debate. Several leading economists and academics have questioned the true strength of India’s growth under Modi, pointing to discrepancies in the data. Many argue that while there has been growth, it is largely concentrated at the very top, fuelling unprecedented inequality.

As rising inflation has hit poorer families the hardest, frustration at the growing chasm between rich and poor is threatening to dent Modi’s popularity. Unemployment – a problem that lies at the heart of the country’s widening inequality – remains a major issue for his re-election campaign as the bottom 50% grapple with a chronic lack of decent jobs.

A recent survey by the Lokniti research programme of the Centre for the Study of Developing Societies found unemployment was one of people’s primary concerns in the election, with more than 60% of respondents saying it had become harder to find a job. “When I hear India called the world’s fastest-growing economy, I get very agitated,” said Ashoka Mody, an economist at Princeton University and author of India is Broken. “Those numbers are not worth the paper they’re written on.”

A rising wealth gap

According to a recent World Inequality Lab report authored by the economist Thomas Piketty and others, India’s top 1% own more than 40% of its wealth. The report found that the concentration of wealth at the top had become particularly pronounced over the past decade, and India was now more unequal than during British colonial rule. In an interview this week, Modi hit back at the criticisms. “Should everyone be poor?” he asked, insisting that wealth distribution would “happen gradually not overnight”.

Yet economists say this rising wealth gap could ultimately hinder India’s ambitions to move beyond its developing, middle-income-country status into a global economic power, and further cement injustice into India’s social fabric.

“In the long run, these astonishing levels of inequality are not good for a developing country. They can slow down growth and create financial instability,” said James Crabtree, the author of Billionaire Raj, which examined the rise of India’s super-rich. “The challenge is we see little evidence of the Modi government trying to bring it under control.”

‘Everything is hard’

More than 400 miles away from Mumbai’s thriving billionaires, yet still in the same state of Maharashtra, poverty remains a daily reality in the region of Melghat. In the parched village of Pachdongri, 28-year-old Ranjanee Ramcharan Bethekar sat on the floor of a small home made from mud and bricks, under a tarpaulin roof, breastfeeding her feverish two-year-old son Rohail. She was fearful. A few years ago her eldest son died, probably from malnutrition, which still kills a child in this deprived area every other day.

It is on Bethekar’s shoulders to support her four children and her husband, who is partially paralysed and unable to work. On the days she can get employment, she labours for 12 hours on road construction or in soya bean fields. For this she receives 200 rupees a day (£2) to feed her family of six.

On days when she cannot find work, she has to forage for food. Bethekar is among the 800 million Indians who receive Modi’s monthly “freebies”, free food grains from the government. These large-scale handouts pre-dated the Modi government, subsidised to cost just a few rupees, but during the Covid pandemic Modi made them free. His government has also been credited with using technology to remove large amounts of corruption from the transfer of benefits to the poor.

For Bethekar, the 25kg of free rice and wheat a month helps her family to survive, but it is often not enough to last and she begs her neighbours for help. “Everything is hard, there are no words to properly express it,” she said.

Toilets were installed in most homes in this village a few years ago under another of Modi’s flagship welfare schemes, but they are not used due to a lack of water supply, meaning open defecation is still widely prevalent. Bethekar’s home still does not have a drinking water tap, despite another government scheme spoken about by the prime minister on the campaign trail, and instead they share an outdoor tap between a dozen households. Water flows from it every three days.

Modi has put these welfare schemes front and centre of his re-election campaign, pledging to maintain the free food and other handouts for a further five years, which has proved popular among voters, particularly women.

Reetika Khera, a professor at the Indian Institute of Technology Delhi, accused him of taking credit for schemes that were introduced before he came to power and “spinning them wildly out of proportion” when it comes to their lasting impact. They also came at a cost of over $400bn, while spending on health and education fell proportionally over the decade..

‘I feel like I am going backwards’

A flurry of experts and economists have accused the Modi government of obstructing efforts to accurately measure India’s poverty levels by “cherrypicking” the release of critical data and surveys, as well as an ongoing delay in carrying out the census.

Maitreesh Ghatak, a professor of economics at the LSE, said what data there was clearly showed that India’s growth was “lopsided”, and he described the failure of prosperity to trickle down as “a problem that has become accentuated in the last 10 years”.

Unemployment is an issue that long preceded the Modi government. But over 10 years the administration stands accused of failing to tackle a chronic lack of secure blue-collar and white-collar jobs for the almost 1 billion Indians who are of working age.

While more Indians are getting educated, the quality of this education is often poor and figures show there are simply not enough good jobs for them once they graduate, particularly in rural areas. More than 90% of Indian workers are still employed informally, which is linked to irregular, exploitative work with low wages and no benefits.

According to recent studies, 42% of graduates have been unable to find a job, and the youth make up 83% of India’s unemployed. Not reflected in these statistics is the even bigger problem of underemployment: most people in India cannot afford not to work and so find any low-wage job to stay alive.

Millions are so discouraged that they are dropping out of the labour force entirely. The situation is worse for women: India has one of the world’s lowest rates of formal female employment.

Across rural villages in states as far flung as Maharashtra and Uttar Pradesh visited by the Guardian, the despair at the lack of jobs was pervasive. In Waifad, a Maharashtra village of 200 houses surrounded by arid agricultural land, there was barely a single home without a young man looking for a job. Most came from farming families and had gone to school and university in the hope of moving away from agriculture, which is now a life of hardship and debt.

With no major private industry to create jobs in the region, the only secure work available here is a government job. Yet these postings come up rarely and each usually gets tens and sometimes hundreds of thousands of applicants. People in many areas complained that they needed to pay bribes of hundreds of thousands of rupees to get these jobs. In several villages, no one had got a government job for the past 10 years.

For most, the only means of survival has been to return to thankless agricultural labour on the cotton, soy and wheat fields that flank the village, or as day labourers on construction sites. Among them is Chetan Mahualkar, 27, who has a bachelor’s degree in arts and was the first in his family to go to university. He has spent the past two years applying for dozens of jobs, everything from clerical work and security guard to the police and the army, getting into debt in the process as it costs each time to apply, but to no avail.

“I wanted something different for my life, not to have this endless struggle and poverty we had as farmers,” Mahualkar said. “Despite having this education, all this time and money spent, I have no option to go back to work on our land. I feel like I am going backwards and the government does nothing to help us. Modi builds highways but where are our jobs?”

Like dozens of men in the village, Mahualkar said he feared no one would marry him, as being a farmer was now tainted as a life of destitution. “They have even taken away my chance of a family,” he said.

Recent election promises made by Modi that he would create millions more jobs in sectors such as infrastructure, aviation and green energy were met with widespread scepticism across Maharashtra’s villages. Many of the frustrated, jobless youth here pointed to a still unfulfilled pledge Modi made in 2014 to create 20m jobs. None intended to vote for him.

“My father is a goat farmer who never went to school, he sacrificed everything so I could get a good education,” said Mahadev Uike, 24, who has a master’s in mathematics. “But because of this employment crisis, I can’t get a job no matter how hard I try. Modi talks about jobs and development, but we know he only works for the rich people.”