In December 2025, newspapers in India carried an arresting, dystopian image: scores of young people sitting obediently in rows on an airstrip in the eastern state of Odisha to take an exam. Over 8,000 test takers had lined up under the sun to compete for 187 posts in the police service. That so many people were willing to take an exam in such inhumane conditions is revealing. In India, government jobs have long been coveted because they bring financial security and a measure of social prestige. But the candidates in Odisha were vying for the lowest rung of the police service. Such a large volume of candidates for such a poorly paid post reflects widespread desperation among educated youth. India’s economy has failed to generate opportunities for the country’s many young people, even as it has recorded an average annual GDP growth rate of six to seven percent over the past three decades.

In the nearly 80 years since gaining its independence, in 1947, India has struggled to deliver broad-based prosperity. In that time, its economy has been through several transitions. It first took the broadly socialist path of centralized planning, state-controlled industrialization through public enterprises, and the raising of barriers to foreign trade. That orientation produced tepid growth, averaging 2.5 percent between 1950 and 1980. India concertedly liberalized its economy in the 1990s, embracing reforms that accelerated growth and massively reduced rates of extreme poverty, which fell from over 50 percent in the early 1980s to less than 20 percent by 2010.

But India failed to engender a deeper economic transformation. Most Indians remain stuck in low-quality, low-productivity jobs: as of 2024, 46 percent of the country’s workers were thought to be in agriculture, according to government data. India’s failings are stark when viewed comparatively. Its per capita GDP is less than one-fourth that of Brazil and one-sixth that of Turkey, two other aspirational middle powers. The gains from growth have been staggeringly unequal. India has more billionaires—205, according to a 2025 Forbes estimate—than any other country apart from the United States and China. At the same time, millions of young people ready to enter the workforce every year find few jobs on offer.

In their sweeping and statistically rich book, A Sixth of Humanity: Independent India’s Development Odyssey, Devesh Kapur and Arvind Subramanian describe the Indian economy as characterized by “prolonged ruralization, stunted industrialization, and precocious servicification.” They show that India did not follow the path that characterized many of the success stories of post–World War II development, including China, Japan, and South Korea. Those countries made investments in boosting agricultural productivity, which in turn raised rural incomes and laid the groundwork for labor-intensive manufacturing that fueled meaningful economic growth and eventually high-skilled services. Instead, India neglected agriculture and skipped lightly over low-skilled manufacturing, seeking to grow on the back of a highly skilled service sector. Kapur, a political scientist, and Subramanian, an economist and former chief economic adviser to the government of India, claim that this gamble has not paid off. India’s unusual path has locked the country into low productivity and low incomes.

Yet the problem, as they see it, rests not simply in economic policy but in the very nature of the Indian state. Kapur and Subramanian celebrate India’s democracy, which emerged in the inhospitable conditions of poverty, low literacy, and entrenched social inequality, as a signal achievement and warn against democratic backsliding under Prime Minister Narendra Modi. But they also suggest that democracy lies at the heart of the country’s economic woes. Democracy in India, they argue, was “precocious,” arriving early with the formal adoption of universal franchise in 1950 at relatively low levels of economic development. Electoral politics in these conditions created pressures that, on the one hand, precluded many of the radical changes needed for economic development (for instance, meaningful land reform) and, on the other, burdened a fledgling state and economy with a plethora of demands from all segments of society for access to subsidies, tax breaks, and regulatory protections. This troubling dynamic had the effect of fostering a state that at once maintains an overweening presence in economic life and fails to provide basic public goods, such as education and health care. No political party is willing to champion market reforms, and the process of liberalization that accelerated in the 1990s has largely stalled. The result is the “durable disappointment” of India, its inability to parlay democratic success into an economic model that creates jobs, educates and trains a strong workforce, and improves people’s lives in a broad and sustained way.

THE PARADOXICAL STATE

Kapur and Subramanian’s examination of India’s economic policy choices weaves in efforts to build a bureaucratic and administrative apparatus and strengthen state capacity. Such a novel approach lays bare the many contradictory impulses and pathologies that have shaped India and contributed to its economic challenges.

Chief among them is what the authors describe as the paradoxical nature of the government, its administrative capacity, and its relationship with society. India’s central problem, according to the authors, is the dominant ideology of statism. Indians view the state as their “provider and protector . . . even as it has also been an apathetic parent and absentee landlord.” One manifestation of this belief is the fact that the government is the country’s employer of choice. Government jobs account for more than 60 percent of India’s tiny formal sector, which according to some estimates makes up only ten percent of total employment in the economy. This has distorted the labor market, especially at the lowest end of the skill spectrum, where state wages are at least twice those in the private sector and make it harder for manufacturers to successfully establish themselves.

At the same time, the Indian state is remarkably thin. In the early 1990s, the global average for state employment as a percentage of the working-age population was 4.7 percent. In India, it was 3.0 percent, a figure that had declined to 2.2 percent by 2011. Moreover, for a state with an overwhelming presence in the country’s imagination and economic life, it is remarkably absent at the local level, where public services ought to be delivered. Local government accounts for less than 12 percent of total government employment.

Answers to India’s chief conundrum lie within the country.

Similarly, despite its avowed socialist leanings at its inception, the Indian state has long failed to provide universal public goods. It did not see the provision of education, for instance, as central to the democratic social contract, in part because of the preference of elites for state investment in higher education. Statist ideology also played a role; the public judged the state’s performance on the basis of its personnel, subsidies, and welfare payments rather than its ability to deliver basic public goods. The Indian state finally began universalizing access to primary and secondary school in earnest in the 1990s, but overall, the quality of both public and private schooling as measured by learning outcomes remains appalling.

Kapur and Subramanian explain these problems by invoking India’s precocious and ultimately “premature” democracy. Democracy’s early arrival, for example, made critical land reforms impossible because electoral pressures meant that the interests of landed elites had to be accommodated. (All successful cases of land reform in contemporary times, including in China, South Korea, and Japan, occurred under conditions that were not democratic.) As electoral competition intensified, the state also became vulnerable to demands from both elites and the broader public for state largess. Indian democracy morphed into what the authors call a “Kamdhenu democracy” (a reference to the bovine goddess of Hindu mythology), in which the state suckles the country’s clamoring constituencies. The government still extends tax breaks to farmers and corporations, provides a variety of subsidies, and refuses to shut down inefficient state-owned enterprises. “Too much was asked of the state, too often and too soon,” the authors write, frequently at the cost of efficiency and growth. By maintaining dominance in various markets, the government asphyxiated private enterprise even as the state did little to supply meaningful public goods. This, the authors say, is India’s democracy tax.

Yet India could not have survived unless it was democratic. From the moment of its birth, outside observers assumed that it was only a matter of time before democracy would give way and this unwieldy, diverse country would fragment. The promise of equal standing through universal franchise and representative government was necessary to hold India together. Democracy arrived early because it was essential to the country’s existence: in this sense, India is sui generis, an audacious experiment that held the promise of “revolutionary changes in the economic and social life of the people . . . without bloodshed,” as B. R. Ambedkar, the architect of India’s constitution, described it. India’s social transformation would take place through democracy—not the other way around. The problem is not, as the authors suggest, that Indian democracy was precocious but that its less-than-satisfactory consequences were not inevitable.

Ambedkar saw tremendous danger in the deep social hierarchies and centuries of caste oppression within Indian society. Democracy was “only a top-dressing on an Indian soil, which is essentially undemocratic,” he wrote. The state had to help promote democratic norms and create a broad-based civic spirit. But to achieve this goal, state power had to be centralized, and its administrative apparatus insulated from parochial and narrow societal pressures. Ambedkar’s vision aligned with the high-modernist desire of Jawaharlal Nehru, India’s first prime minister, to manage the economy through central planning and infuse technocratic and bureaucratic apparatus with a scientific temperament. A centralized state emerged, empowered to impose its political authority on the country.

But the imperative of centralization clashed with the imperative of nurturing a democratic culture. A centralized state had no incentive to solicit the participation of society in exercising its power or to forge a social contract around universalistic, democratic norms and the delivery of social and public goods. Instead, the Indian state derived its legitimacy from the top-down exercise of power. For most citizens, the state was a distant bureaucracy whose power could provide an escape from oppressive social hierarchies. Democracy came to be seen as a route to access state power rather than a means to demand that the state serve the general public good. Electoral competition coalesced around demands for government jobs, with quotas established for particular social groups, and around extracting subsidies and state protections. Democracy’s success lay in the space it created for new, hitherto marginalized, and oppressed groups to mobilize and gain that state power. But it also resulted in forging a transactional relationship between state and society in which government power was deployed to serve private interests rather than the broader public—and was not held accountable for the delivery of public goods. The Kamdhenu state derives from this transactional logic, as does the paradox of an electorate consigned to seeking education, sanitation, and health care from the private sector while demanding that the state play a leading role in most arenas of economic and social life, whether as the number one employer or as a manager of temples.

India’s path from socialism to capitalism has entrenched this transactional logic. Its big businesses are deeply intertwined with state power, leading to a high degree of capital concentration and the capture of political elites through election financing. This has precluded India from following the East Asian model in which the state directed innovation and stoked competition in the private sector. And it has also eroded appetite for liberal market reforms. No politician can credibly subject vulnerable parts of society (notably farmers and low-wage laborers) to the vagaries of the market while protecting big businesses. These dynamics make it hard for the government to deregulate key sectors of the economy, including agriculture and energy. In this light, the statism of Indian society seems almost rational.

LABORATORIES OF DEMOCRACY

Yet zoom in, and the picture is not so bleak. This broad-stroke portrait of Indian economic and political life obscures the achievements—and better political arrangements—that can be found among some of the country’s 28 states. In some parts of India, society mobilized to push successfully for more diffused and participatory state power, notably in the states of Himachal Pradesh, Kerala, and Tamil Nadu. These states boast significantly better human development indicators than much of the rest of the country. Kerala and Tamil Nadu have a long history of social movements that resisted caste-based discrimination and in the process encouraged people to make a collective demand for public goods. Kerala, in particular, developed a robust local government and built networks of women’s associations that contributed to ensuring that the state had one of the best human development outcomes in the country; in 2025, the state government declared that Kerala was the first state in the country to eradicate extreme poverty. In Himachal Pradesh, the provincial bureaucracy successfully ensured access to primary education earlier than in many other parts of the country and has sought to share its power through local civic organizations. Even in difficult settings, such as India’s poorest state, Bihar, women gained greater access to financial services and education when the state made an active effort to mobilize women into local village associations.

The authors generally pay insufficient attention to the role played by organized civil society and nongovernmental organizations in fostering social transformation. Civil society has been instrumental in pushing the obdurate government toward experiments in access to rural credit, improving the quality of education, and designing the National Rural Employment Guarantee Act, a law that ensured rural households paid unskilled work from the government. (The act was repealed in December 2025.) India’s abiding disappointments are not simply a product of a precocious, premature, and elite-dominated democracy. Rather, they are the consequences of the organization of state power and the type of democratic social contract that it has enabled. Democracy offers evidence of how best to reshape this contract. But it would require India to recommit itself to the possibilities of democracy and to resist the political winds that are pushing the country toward democratic backsliding under its current Hindu nationalist government.

In one of the most informative and insightful chapters of the book, the authors trace the divergent paths to growth of different parts of the country. Despite the country’s pathologies, one-third of India, chiefly its southern and western states, grew faster than China did in the last four decades. Each of these states has defied the traditional prescription for achieving growth, finding its own path. Kerala undertook serious land reforms between 1950 and 1970, but much of its growth in recent decades has come from remittances sent by migrants in the Gulf. Karnataka and Andhra Pradesh have grown on the back of highly skilled services, while Tamil Nadu is emerging as a manufacturing hub. This diverse experience suggests that more robust federalism is critical. The central government must allow the states greater agency. The record of Indian states also suggests that answers to India’s chief conundrum—how to find a model of development that delivers jobs and prosperity to its youth—lie within the country.

The authors don’t delve into this, but India’s states have also been pioneers in finding new ways to balance the demands of redistribution and growth, including by providing school meals, distributing bicycles to help girls get to school, and mobilizing women’s groups to improve access to markets. These experiments began locally in response to democratic pressure before they made their way into the national debate. They offer a reminder that democracy, for all its potential failings, can be a powerful self-corrector. In this moment of global disenchantment with democracy, India offers some hope, even if many citizens have forgotten the power of their achievements.

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