Frequently you would hear India is a fast-growing economy. It is a developing country. But aren't the developed countries like the U.S. also growing? But if both are growing then why is the latter one called a developed country and the former a developing?
We generally use growth and development interchangeably. But there's a difference between the two. While growth is more of a quantitative concept, development focuses more on the qualitative aspect. Simply put - growth signifies getting bigger in volume while development refers to bigger expanse with quality. It's something like growing big physically and growing big with good health and better intelligence.
In terms of economics, growth focuses on the quantitative expansion in the aggregate volume of goods and services produced by a nation, generally measured in terms of GDP growth. Economic development, on the other hand, encompasses broader qualitative improvements in living standards, well-being, and social progress, including such factors as living conditions, health, education, and equality.
Difference Between Economic Development and Economic Growth
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India's real GDP growth for FY25 was recorded at 6.5%, with the fourth quarter (Q4) showing a strong 7.4% growth, highlighting robust economic growth. India's economic growth was stimulated by public investment in infrastructure, private capex and rising household investments in real estate. Government initiatives have been aimed at boosting the country's manufacturing sector through improvements in the business environment, enhancement in logistics infrastructure, improvement tax efficiency and rationalization of the taxation system (both rates and structure). However, disparities in income distribution, healthcare access, and education quality indicate significant gaps in economic development.
India ranks 130 out of 193 countries in the 2025 Human Development Report (HDR) released today by the United Nations Development Programme - progress from 133 in 2022. The Human Development Index (HDI) value increased from 0.676 in 2022 to 0.685 in 2023, with India remaining in the medium human development category, inching closer to the threshold for high human development (HDI ≥ 0.700).
Healthcare Situation in India
According to the Economic Survey of India, 2024-25, there are 13.86 lakh practitioners of modern medicine registered as of July, 2024, translating into doctor-to-patient ratio of 1:1263 - that's about 26% more than what WHO suggests [1]. According to the Government, WHO's "standard norm of 1:1000 seems to be attainable by 2030 with a conservative 50,000 doctors being licensed every year till 2030" [1, p. 326]. India's nurse-to-population ratio is 1:670, below WHO's 1:300 recommendation [2]. In India, that imbalance plays out every day in hospitals, clinics, and elder care homes [3]. The situation becomes perticularly dire in geriatric care. India has around 150 million people aged 60 and above, a number expected to nearly double by 2030 [2].
Yet, according to Hoilenchong Sitlhou, senior nurse and geriatric care expert at Antara Care Homes, training and retention of skilled nurses remain key challenges.
Source: https://thesecretariat.in/article/status-quo-for-health-in-budget-can-it-make-india-viksit
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There is an acute shortage of medical professionals, along with relatively low healthcare expenditure as a percentage of GDP. Additionally, the country faces a shortage of hospital beds. To achieve the target of 3 beds per 1,000 people by 2025, India requires approximately 3 million additional beds. Presently the ratio stands at 1.3 beds per 1,000 (both private and public hospitals included) according to a report by Knight Frank and Berkadia [4, 5].
There is a massive need of skilled doctors, nurses and hospital beds. There is huge scope for investment and employment generation and ultimately add to GDP. While improvement in this segment will bring out all round improvement and hence development, the GDP will grow to.
Wealth Distribution
These are the hidden figures or economic numbers that actually matter and go beyond simple GDP growth to check into the true state of the economy. It helps us to understand whether the benefits of India's progress in terms of numbers are translating into benefits for its people - a key factor in generating insight into the wellbeing of the nation.
India's GDP is projected to grow at 6.7% in FY26, surpassing the global average of 2.7% [6, 7]. The same growth rate has been projected for FY27 [7], which is a downwards revision by just 0.1 percentage point. This reinforces that steady and strong growth is expected in India.
However, when we look at how much of the wellbeing trickles down to the masses, we see a dismal picture. Various data reveal that more than 77% of the nation's wealth is owned by the richest 10% of the Indians, which highlights the persistence of income inequality. These widening gaps and rising inequalities adversely affect women and children the most [8].
Source: https://jgu.edu.in/opjgublog/difference-between-economic-growth-and-economic-development/#:~:text=The%20economics%20of%20growth%20and,standards%2C%20healthcare%2C%20and%20education
The Future
There is no doubt that India as a nation is treading the growth path. The global economy will vouch for it. We are on road to become the 3rd largest economy in the world with the goal to become a high middle-income country by 2047 and achieve net-zero emissions by 2070. Robust domestic consumption, private investment, and such government initiatives as "Make in India" and digital transformation have been some of the key growth drivers. We have seen poverty decline, inflation being put on leash, growth in connectivity due to rapid penetration of internet and mobile technology, greater discretionary spending, conducive policies to boost housing for the masses, higher employment generation, etc.
Irrespective of the relatively subdued performance in comparison to China, the Indian economy has witnessed substantial absolute growth over the last 30 years or so. The nearly 3.6% yearly income growth during 1990-2022 was accompanied by increased national wealth- India's aggregate wealth-to-income ratio (β) increased from 3.83 in 1995 to 5.75 in 2022 [9].
Along with this, the rate of extreme poverty in India has declined significantly between 2011-12 and 2025. As per World Bank data, the number of people living in extreme poverty dropped from 27.1% to 5.3%, lifting as many as 269 million people out of poverty. This translates to a fall in the number of people surviving on less than $3 per day (in 2021 purchasing power parity terms) from 344.47 million to 75.24 million [10]. That's more than the population of several countries in the world. What still remains a matter of grave concern is that while poverty has seen significant decline, challenges continue to hinder equitable distribution of not only wealth but also opportunities [11].
India very close to overtaking Japan as the world's fourth-largest economy. While the sounds of it make us rejoice and feel proud, the picture is far from rosy. It is not yet the time for India to become complacent. Japan continues to remain significantly ahead of our country in terms of per capita GDP. According to April 2025 IMF data, India's GDP per capita of $2,878.4 is about 8.5% of Japan's GDP per capita of $33,955.7, which means that Japan's per capita income is roughly 12 times more than ours. [12]. It is high time for the Indian Government to play a meaningful role in the country's development if we are not just to grow size but also in quality.
Government to play a positive role
India's new economic status and reputation is expected to act as a catalyst for accelerating reforms which will ensure trickle down and, in the process, translate the growth into higher living standards for every citizen - not just pamper or boost the middle class burgeoning in the urban and the rural epicentres. It is the only way equitable distribution can be ensured and the only way India can ensure that the rich don't turn richer at the expense of the poor and the lesser privileged. The Government should, can and is playing a positive role by creating a conducive environment that fosters all round development. Policies are being mended, new development policies introduced, infrastructure developed, social welfare initiatives for women and children are being implemented, new opportunities including employment being generated. Some of the initiatives introduced by the Government of India to balance economic growth with development, are:
Government to play a positive role
Make in India: Aimed at enhancing the indigenous manufacturing output, boosting GDP growth - Production linked incentives are also being provided.
Startup India: Aimed at encouraging entrepreneurship and job creation.
Pradhan Mantri Gharib Kalyan Anna Yojana: Aimed at ensuring food security for 80 crore citizens until December 2028.
National Health Mission: This aspect focuses on improving healthcare services in rural areas.
Pradhan Mantri Gram Sadak Yojana: Aimed at providing connectivity to unconnected Habitations as part of GoI's poverty reduction strategy [13].
These policies aim to achieve both quantitative economic growth and qualitative development.
Conclusion
Economic growth and economic development are not independent of each other. For a country to progress while the first is the necessary condition, it alone is not sufficient. Development must accompany. Each has a different purpose to serve in bolstering a nation's progress. Growth initiatives increase in production and income, while development ensures improvements in social justice, welfare, sustainability and overall quality of life of the citizens. Indeed, India's rapid GDP growth is commendable. However, one must not ignore the such challenges as inequality and lack of universal healthcare in the elation of growth. These challenges indicate the need to prioritise balanced economic development over accelerated growth.
Bibliography
[1] Government of India, "Economic Survey 2024-25," Department of Economic Affairs, Ministry of Finance, Government of India, New Delhi, 2025.
[2] D. Clarance, "Short staffed, overburdened, undervalued: India's nursing deficit deepens," India Today, 04 Jun 2025.
[3] D. Clarance, "Elderly Indians travel 14.5 km on average to see a doctor: Lancet study," India Today, 25 Apr 2025.
[4] Medical Buyer, "India's govt hospital bed-population ratio dismally low at 0.79:1000," 17 Dec 2024. [Online]. Available: https://medicalbuyer.co.in/indias-govt-hospital-bed-population-ratio-dismally-low-at-0-791000/#:~:text=India's%20public%20healthcare%20system%20is,India%20has%20yet%20to%20achieve. [Accessed 26 Jun 2025].
[5] PTI & CNBC TV18, "India needs additional 2.4 million hospital beds to reach recommended ratio: Report," 23 Nov 2023. [Online]. Available: https://www.cnbctv18.com/healthcare/india-needs-additional-24-million-hospital-beds-to-reach-recommended-ratio-report-18398041.htm. [Accessed 26 Jun 2025].
[6] Economic Times, "India to grow at 6.7% for next 2 years: World Bank," 17 Jan 2025. [Online]. Available: https://economictimes.indiatimes.com/news/economy/indicators/india-to-grow-at-6-7-for-next-2-years-world-bank/articleshow/117310922.cms?from=mdr. [Accessed 26 Jun 2025].
[7] PIB, "India: World's Fastest-Growing Major Economy," 18 Jan 2025. [Online]. Available: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2094025#:~:text=Introduction,%2C%20innovation%2C%20and%20unmatched%20potential. [Accessed 23 Jun 2025].
[8] OXFAM International, "India: extreme inequality in numbers," 06 Sep 2022. [Online]. Available: https://www.oxfam.org/en/india-extreme-inequality-numbers. [Accessed 30 Jun 2025].
[9] N. K. Bharti, L. Chancel, T. Piketty and A. Somanchi, "Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj," World Bank, 2024.
[10] PIB, "India's Poverty Story Transformed," 07 Jun 2025. [Online]. Available: https://www.pib.gov.in/FactsheetDetails.aspx?Id=149221. [Accessed 27 Jun 2025].
[11] World Bank, "The World Bank In India," 16 Sep 2024. [Online]. Available: https://www.worldbank.org/en/country/india/overview#:~:text=Economic%20Outlook,/26%20and%20FY26/27. [Accessed 23 Jun 2025].
[12] PTI, "India may surpass Japan in GDP, but remains far behind in per capita terms: Claude Smadja: CNBC TV18," 08 Jun 2025. [Online]. Available: https://www.cnbctv18.com/economy/india-may-surpass-japan-in-gdp-but-remains-far-behind-in-per-capita-terms-claude-smadja-19617370.htm. [Accessed 30 Jun 2025].
[13] National Rural Infrastructure Development Agency (NRIDA), "PRADHAN MANTRI GRAM SADAK YOJANA : Programme Guidelines," 29 Jun 2025. [Online]. Available: https://omms.nic.in/. [Accessed 30 Jun 2025].
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