- Ramphal Kataria
“Amrit Kaal, Austerity for the Poor: The Political Economy of Inequality”
Abstract
India’s remarkable economic expansion in the post-liberalization era has coincided with a deep and dangerous widening of inequality. This essay revisits Karl Marx’s Das Kapital (1867) and Vladimir Lenin’s Imperialism: The Highest Stage of Capitalism (1917) to interpret India’s 21st-century political economy. It argues that what appears as “growth” is, in fact, a process of structural exclusion — a system that concentrates wealth at one pole and multiplies insecurity at the other. Drawing on data from the World Bank, NITI Aayog, and Oxfam, the essay demonstrates that India’s neoliberal reforms have privatized profit and socialized loss, hollowing out the egalitarian promises of democracy. In Marxian terms, the nation has perfected the “general law of capitalist accumulation” within its own borders: prosperity for a few built upon the precarity of many. Unless economic democracy — through redistribution, labor rights, and public investment — is restored, the republic risks becoming prosperous in statistics yet impoverished in soul.
“Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, and mental degradation at the opposite pole.”
— Karl Marx, Das Kapital (1867)¹
I. The Mirage of Prosperity
In the great Indian growth story, statistics gleam brighter than streets.
According to the World Bank, extreme poverty in India has fallen to just 2.3% (2022–23), down from 16.2% in 2011–12. The State Bank of India projects it to fall further to 4.6% by 2024. Likewise, the NITI Aayog–UNDP Multidimensional Poverty Index (MPI) claims that 248 million people have moved out of multidimensional poverty between 2013–14 and 2022–23.²
At first glance, these figures suggest a triumphant story of social mobility and policy success. Yet, as The Tribune editorial “Glaring Inequality: India’s Rich Keep Getting Richer” observed, the richest 1% of Indians have expanded their wealth by 62% in two decades — even as the majority barely sustain themselves.³ The global pattern mirrors this: the richest 1% captured nearly two-fifths of all new wealth created worldwide since 2000, while the bottom half received barely 1%.
India’s paradox is striking. It ranks as the third-largest economy by purchasing power parity (PPP), yet nearly a billion people lack discretionary income to purchase non-essential goods.⁴ The average Indian’s monthly per capita expenditure hovers around $60, masking stark inequalities between urban elites and rural laborers.⁵ The country may have reduced statistical poverty, but it has deepened structural inequality.
This is not a developmental accident — it is the architecture of Indian capitalism.
II. Marx and the Machinery of Inequality
In Das Kapital, Karl Marx exposed the inner mechanism of capitalist accumulation. He wrote that the wealth of nations expands by “appropriating unpaid labor,” where the “surplus value” extracted from workers becomes the foundation of capital’s growth.⁶ Profit, therefore, is not a sign of efficiency but of exploitation.
In modern India, this logic has been perfected. The corporate sector enjoys tax holidays, cheap credit, and public subsidies, while the working class is increasingly informalized. Over 80% of India’s labor force is now engaged in informal or contractual work — lacking security, benefits, or bargaining power. The gig economy, hailed as innovation, is merely a digitalized extension of the old capitalist order: maximum labor flexibility for the employer, minimum rights for the worker.
Marx’s “general law of capitalist accumulation” is vividly alive in today’s India —
*“The greater the social wealth, the greater the industrial reserve army… the more extensive the official pauperism.”*⁷
Unemployment among educated youth hovers at double digits. Government jobs have shrunk, and contractualization has become the new normal. Education and healthcare are now commodities accessible only to those with money in their pockets. The so-called “Amrit Kaal” of development thus conceals the bitter truth of a society where labor has been devalued, and speculation has replaced production.
III. Caste and Class: The Twin Burdens
Unlike the European industrial capitalism of Marx’s time, Indian inequality carries a double burden—caste and class. The hierarchies of birth merge seamlessly with hierarchies of wealth. Dalits and Adivasis remain overrepresented among the poor and underrepresented in corporate or administrative power. Land reforms have stalled, and rural indebtedness reproduces caste dominance in agrarian relations.
In this light, capitalism in India is not a moderniser but a preserver of feudal inequities, cloaked in the language of development. The new rich may wear suits instead of turbans, but they inherit the same logic of exclusion.
IV. Lenin’s Vision and the Indian Oligarchy
If Marx explained the internal contradictions of capitalism, Vladimir Lenin diagnosed its global mutation in Imperialism, the Highest Stage of Capitalism (1917). He identified five defining features of imperialism:
1.
1. The concentration of production and capital leading to monopolies.
2. The fusion of industrial and banking capital into finance capital.
3. The export of capital as opposed to commodities.
4. The formation of international monopolist associations dividing the world.
5. The territorial division of the globe among capitalist powers.⁸
In Lenin’s schema, imperialism was not foreign policy — it was the economic logic of capitalism in decay. India today, while post-colonial, exhibits every symptom of this late-capitalist disease. A handful of conglomerates — in energy, telecom, infrastructure, finance, and media — dominate the national economy. Finance capital, the alliance of banks, corporate houses, and state policy, has become the invisible hand that guides governance.
The merger of corporate and political power is the hallmark of India’s twenty-first century oligarchy. Public institutions are privatized, natural resources leased to select firms, and policy tailored to the convenience of a few industrial dynasties. The export of capital manifests through tax havens, foreign acquisitions, and state-sponsored overseas expansions, even as domestic small and medium enterprises struggle to survive.
Lenin described this phase as “parasitism and decay” — a stage where sections of society live off dividends and financial speculation, detached from productive labor.⁹ India’s booming stock markets and billionaire lists, contrasted with stagnant wages and farmer distress, are not contradictions; they are the outcomes of the system Lenin foresaw.
V. The Poverty of Plenty
Government statistics show a fall in “income poverty,” but poverty has become multidimensional, persistent, and disguised. The Multidimensional Poverty Index (MPI) does not capture relative deprivation — the growing chasm in access to opportunities, dignity, and social mobility.
Food insecurity remains rampant. Despite record agricultural output, malnutrition persists, and over 40% of children under five are stunted. Rural India faces chronic underemployment; urban India battles a cost-of-living crisis. The poor have not vanished — they have been redefined.
Welfare transfers — free food grains, direct benefit transfers (DBT), and token cash subsidies — offer relief without reform. These programs, though necessary, function as political anesthetics: they numb social discontent without curing the structural disease. As seen recently in Bihar, cash handouts before elections have replaced substantive development as the new grammar of governance.
In Marxian terms, these are “illusory communities” created by capital — spaces where the poor feel temporarily included even as their exploitation continues. The economy grows, but the worker shrinks.
VI. Political Economy of the Inequality State
India’s neoliberal turn since the 1990s promised efficiency, investment, and employment. Instead, it has produced privatized profits and socialized losses. Corporate tax rates have fallen from 35% in the 1990s to around 22% today, while indirect taxes — particularly GST — disproportionately burden the poor.¹⁰
The state has retreated from welfare but remains an active agent in corporate accumulation. Public assets — railways, airports, ports, energy utilities — are sold or leased to private conglomerates. Simultaneously, the state extends loans, bailouts, and regulatory forbearance to the same corporate entities, creating a system Lenin would recognize as the dictatorship of finance capital.¹¹
Meanwhile, democratic institutions have been hollowed. Media ownership is concentrated in corporate hands; dissenting voices are criminalized. The judiciary often refrains from challenging corporate-friendly legislation. The result is a corporate–state symbiosis where public policy mirrors boardroom strategy.
Social divisions — caste, religion, region — are politically weaponized to fragment what Marx called the class consciousness of the proletariat.¹² Instead of solidarity, there is suspicion; instead of collective struggle, competitive victimhood. This fragmentation is not incidental — it is essential to sustaining inequality.
VII. The Gig Republic: Labor in the Age of Algorithms
The new avatar of India’s working class is the gig worker — flexible, disposable, and invisible. The delivery rider, cab driver, and digital freelancer embody the “freedom” Marx mocked:
*“Free laborers… are free in the double sense: free from the old relations of dependence, and free from all property.”*¹³
Gig work represents the proletarianization of the educated, where college graduates toil for piece-rate payments mediated by apps, devoid of security or benefits. Platforms like Zomato, Ola, or Swiggy symbolize what Marx termed “surplus population” — labor that sustains capital’s expansion without social recognition.
India’s youth — often hailed as its demographic dividend — are instead a reserve army of underemployment. The formal sector sheds jobs; the informal sector absorbs despair. The promise of Atmanirbhar Bharat (self-reliant India) has translated into self-employed precarity.
VIII. The Political Myth of Growth
The state’s narrative of success depends on macro illusions: GDP growth, FDI inflows, and fiscal consolidation. Yet GDP itself is an inadequate measure of human well-being. It counts the building of luxury malls and the destruction of forests as equal contributions to “growth.”
As Marx warned in Value, Price and Profit (1865), wages do not rise in proportion to productivity under capitalism; rather, the value of labor power is determined by subsistence.¹⁴ The worker’s purchasing power thus stagnates even as national income increases.
Today, India’s middle class — once seen as the engine of consumption — faces declining disposable income, mounting debt, and reduced upward mobility. The top 1% controls over 40% of national wealth, while the bottom 50% owns less than 6%.¹⁵ This is not merely inequality; it is economic apartheid.
IX. The New Imperialism: Domestic and Digital
Lenin’s analysis of imperialism as the export of capital finds a new resonance in digital capitalism. Global tech monopolies — operating as quasi-states — extract data and profits from Indian consumers without accountability. Meanwhile, domestic corporates replicate imperial practices within national borders, displacing small traders and controlling supply chains.
This internal imperialism is marked by the subjugation of informal India — small farmers, artisans, and petty retailers — to the command of digital-financial empires. The state, instead of acting as arbiter, facilitates this conquest through deregulation, privatization, and surveillance capitalism.
As Lenin cautioned,
*“Imperialism is capitalism in that stage of development in which the dominance of monopolies and finance capital has established itself.”*¹⁶
India’s present trajectory fulfills that prophecy: monopoly capitalism with democratic ornamentation.
X. The Illusion of the ‘New India’
The slogan of New India—digitised, aspirational, self-reliant—rings hollow when confronted with data on hunger and malnutrition. India ranks 111th out of 125 countries in the Global Hunger Index 2024, and child stunting affects one in three. The promise of a USD 5-trillion economy means little to the millions for whom food, shelter, and dignity remain elusive.
Marx and Lenin both warned against mistaking technological advancement for social progress. The gleam of digitalisation and AI-driven growth hides the manual scavenger, the contract worker, and the unpaid care labourer—figures rendered invisible in the GDP’s arithmetic.
XI. Democracy Without Equality
Economic inequality begets political inequality. The concentration of wealth translates into control over media, political funding, and electoral influence. Policy becomes the domain of the rich, while the poor are pacified through symbolism — “Jan Dhan” accounts, “Ujjwala” gas cylinders, “free ration.”
The purchasing power of democracy itself has shifted: votes are cheap, campaigns are expensive. This inversion mirrors Marx’s warning that political rights, under capitalism, are formal rather than real.¹⁷
As institutions weaken, dissent is branded sedition; criticism is labeled anti-national. The poor, who once formed the moral center of Indian democracy, now inhabit its periphery — spectators in a spectacle of populism.
XII. Toward a People’s Economy
To reverse this moral inversion, India must reclaim economic democracy — the idea that growth must serve citizens, not corporations. That requires:
Progressive taxation to redistribute wealth.
Universal social protection for all workers, formal and informal.
Public investment in education, health, and rural infrastructure.
Democratization of credit and land reforms to empower small producers.
But more fundamentally, it requires what Marx called the “revolutionary reconstitution of society at large” — a transformation not only of structures but of consciousness.¹⁸
As long as inequality is treated as a moral failure rather than a systemic outcome, India will remain a republic of the rich and a democracy of the poor. The lesson of Marx and Lenin is not ideological nostalgia — it is analytical necessity. Capitalism, left unchecked, devours its own foundations: labor, community, and the planet itself.
“India’s billionaires rise faster than its bridges, and its poor wait longer than its promises.”
XIII. Conclusion: The Inverted Republic
In today’s India, poverty statistics have declined, but poverty itself has diversified — into insecurity, indignity, and inequality. The economy grows upward, but society collapses inward.
Marx wrote that capitalism carries within it the “seeds of its own destruction”; Lenin believed imperialism was capitalism’s dying stage. Yet in India, it seems capitalism has discovered how to thrive on its own decay — feeding off divisions, illusions, and the labor of a billion forgotten citizens.
Unless the state re-centers its moral and fiscal compass on the people — not on profit — the world’s fastest-growing economy may soon become the world’s most unequal democracy.
Footnotes
1. Marx, Karl. Das Kapital: Critique of Political Economy, Vol. I. (1867), Ch. 25.
2. NITI Aayog & UNDP. National Multidimensional Poverty Index 2023.
3. The Tribune (Editorial, Nov. 2025), “Glaring Inequality: India’s Rich Keep Getting Richer.”
4. World Bank. Poverty and Inequality Platform, India Update 2024.
5. National Sample Survey (NSS), Consumer Expenditure Survey 2022–23.
6. Marx, Karl. Das Kapital, Vol. I, Ch. 9.
7. Marx, Karl. Das Kapital, Vol. I, Ch. 25.
8. Lenin, Vladimir Ilyich. Imperialism, the Highest Stage of Capitalism (1917), Ch. 7.
9. Lenin, Imperialism, Ch. 10 (“The Parasitism and Decay of Capitalism”).
10. Government of India, Union Budget Reports 2010–2024.
11. Lenin, Imperialism, Ch. 3.
12. Marx, Karl & Engels, Friedrich. The Communist Manifesto (1848).
13. Marx, Das Kapital, Vol. I, Ch. 6.
14. Marx, Karl. Value, Price and Profit (1865), Ch. 14.
15. Oxfam India, Survival of the Richest Report 2023.
16. Lenin, Imperialism, Preface to French and German Editions.
17. Marx, Critique of the Gotha Programme (1875).
18. Marx & Engels, The Communist Manifesto (1848).
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