OPINION I Times of India

India is poised to become the world’s third-largest economy. Yet, behind the headlines of rising GDP lies a more sobering truth: for most Indians, the economic status of their parents still defines their future. The promise that hard work and talent alone can shape one's destiny is not the reality for many. This is not just an inequality of income, it is an inequality of opportunity.

Results from PRICE’s ICE 360° 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 disadvantages 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 who benefits remains unequally distributed.

The Geography and Social Structure of Mobility

The IGE figures vary sharply across India's demographic and geographic landscape. Urban India, despite having better infrastructure, schools, and markets, shows lower mobility (IGE = 0.57) than rural India (IGE = 0.51). This surprising trend reflects the deeply segmented nature of urban opportunities, where access to quality education, formal employment, and social capital is largely inherited.

At the state level, the 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 alone doesn’t guarantee opportunity unless it is inclusive and equitable.

Caste continues to shape mobility outcomes. Scheduled Tribes (IGE = 0.66) experience the most limited mobility, while General Category groups also show high persistence (IGE = 0.6226), 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 (OBCs), with IGE at 0.53, lie in between.

Religious identity also plays a significant role. Muslims have the highest IGE (0.63) among all religious groups, pointing to continued marginalisation in education, housing, and employment. By contrast, Sikhs (IGE = 0.24) show far higher mobility, possibly due to better access to community networks and enterprise.

Education and Occupation: Not the Great Levellers Yet

If education were the great leveller, we would expect low IGE across educated households. But the 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 remain 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 contrast, those engaged in non-agricultural self-employment (IGE = 0.34) and non-agricultural labour (IGE = 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.

India in Global Perspective

To appreciate the gravity of India’s challenge, it helps to compare globally. With an IGE of 0.56, India ranks among the least mobile economies—comparable to Brazil (0.60–0.70) and South Africa (0.63–0.70), all of 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. The United States, often mythologised as a land of opportunity, shows IGE between 0.40–0.50, reflecting racial and spatial divides. The UK (~0.35) performs somewhat better. But the real benchmarks are the Nordic countries (0.20–0.30), where universal education, robust welfare, and labour protections support upward mobility for all. These global comparisons confirm what Indian data already suggests: economic growth does not automatically dismantle inequality of opportunity.

What Policymakers Must Do

For India’s policymakers—especially at institutions like NITI Aayog, the Finance Ministry, The Finance Commission and the Reserve Bank—the implications are urgent. First, 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.

Second, policies must be tailored to the most immobile groups—particularly Scheduled Tribes, Muslims, and families in volatile occupations. Investments in early childhood care, remedial education, skilling, and urban inclusion must target these communities.

Third, higher education reforms must focus on quality, not just quantity. Graduates from marginalised backgrounds must have real pathways into secure employment, not just credentials.

Fourth, the informal and self-employed sectors, which show higher mobility potential, need formal support—through credit, training, digital inclusion, and market access.

The Real Test of Development

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?