Relevance: GS Paper 1 (Social Issues – Poverty) & GS Paper 3 (Inclusive Growth)

Source: The Hindu

1. The Big Picture: A Decade of Change

In a healthy country, everyone wants to move up the economic ladder. This is called Income Mobility. However, recent data from 2014 to 2025 shows a mixed and somewhat worrying picture for Indian families.

• Slipping Down: The number of families falling to a lower income level has nearly doubled. It went from 14% in 2015 to 26.8% in 2025.
• Moving Up: While many people also moved up (from 14.1% to 23.5%), the number of people “slipping down” was higher.
• The Net Result: By 2025, more than one in four Indian households felt they were financially worse off than they were ten years ago.

2. Social Layers: Caste and Religion

In India, your social background often decides how easily you can grow. The data shows that the “economic ladder” is harder to climb for some groups than others.

• OBCs and SCs: These groups saw a sharp rise in Downward Mobility. By 2025, about 25% of these households were poorer than they were in 2014.
• Scheduled Tribes (ST): Surprisingly, ST households showed more strength. They didn’t slip down as much, possibly due to specific government support in tribal areas.
• Rural Struggles: Families in villages faced the most trouble. Nearly 29% of rural households saw their financial condition worsen over the decade.

3. Why is it Hard to Stay at the Top?

• Informal Sector Hits: Most Indians work in small shops, farms, or as daily wagers. Events like the pandemic hit these “small players” the hardest, making it difficult for them to recover.
• The Inequality Trap: If you live in a district where the gap between the rich and the poor is very wide, it is much harder to move up. This is called Entrenched Inequality.
• High Costs: Even if a family earns more, high spending on Health and Education often pushes them back into debt and lower income levels.

Important Terms Simplified

1. Income Mobility: The ability of a family to improve its financial status over time.
2. Downward Mobility: When a family becomes poorer and moves to a lower income group.
3. Informal Sector: Small businesses or jobs that are not officially registered (like street vendors or small-scale farming).
4. Vulnerability: The risk of falling into poverty due to a single “shock” like an illness or a job loss.

UPSC Value Box

Why this matters for Governance:

• Social Stability: If people feel they are getting poorer despite hard work, it can lead to frustration and social tension.
• Economic Growth: For India to become a developed nation (Viksit Bharat), we need “Inclusive Growth”—where the bottom 50% also moves up.

The Way Forward: We must move from just “GDP growth” to “Job-Rich Growth.” This means supporting small businesses and the informal sector so that families have a “safety net” to prevent them from slipping down.

Summary

Between 2014 and 2025, India saw a “Cycle of Vulnerability.” While some grew rich, 27% of households actually became poorer. To fix this, India must ensure that a person’s Caste or Geography does not stop them from moving up the economic ladder.

One Line Wrap: True progress is not just about the rich getting richer, but about ensuring the poor do not slip further down.

“Despite high economic growth, downward income mobility remains a challenge for India’s vulnerable sections.” Discuss the socio-economic reasons behind this trend. (10 Marks, 150 Words)

Model Hints

• Intro: Define income mobility and mention the trend where 26.8% of households saw a decline between 2014 and 2025.
• Body:
  • Discuss the struggle of the Informal Sector and Rural Distress.
  • Explain how Caste (SC/OBC) and Unequal Districts act as barriers to moving up.
  • Mention that high private costs for health/education make families vulnerable.
• Conclusion: Suggest focusing on Human Capital (health/education) and social safety nets to make families “shock-proof.”