Context

• It was the best of times; it was the worst of times,” wrote Charles Dickens in A Tale of Two Cities.
• The phrase captures India’s economic trajectory between 2014 and 2025, a period marked by visible prosperity alongside deepening distress.
• While narratives of growth and declining inequality dominate public discourse, patterns of income mobility, vulnerability, and distributional change reveal a more complex reality.
• The dominant trend over the decade points toward rising downward mobility, uneven upward mobility, and persistent structural inequality shaped by caste, religion, and geography.

Understanding Income Mobility: Concept and Method

• Defining Mobility
  • Households are grouped into three categories based on 2014 per capita income: top 10 percent, next 40 percent, and bottom 50 percent.
  • Mobility is measured relative to this benchmark: movement upward, downward, or remaining unchanged. This framework captures shifts in economic position rather than isolated income levels.
• Data and Periodisation
  • The analysis relies on real per capita income data from the Consumer Pyramids Household Survey (2014–2025), structured as a balanced panel.
  • The decade is divided into two phases, 2014–19 and 2019–24, to assess shifts around the 2019 general election.
  • This approach enables assessment of longitudinal trends, election cycles, and structural shifts.

National Trends: A Tilt Toward Decline

• Downward mobility nearly doubled from 14 percent in 2015 to 26.8 percent in 2025. Meanwhile, the proportion of households remaining in the same income group fell from over 70 percent to below half.
• Although upward mobility rose from 14.1 percent to 23.5 percent, it consistently lagged behind decline. By 2025, more than one in four households were worse off relative to 2014.
• The balance of movement increasingly favoured descent rather than ascent, reflecting growing economic insecurity, fragile household resilience, and widening income dispersion.
• The pattern suggests that aggregate growth has not translated into broad-based progress.

Rural–Urban Divide: Uneven Gains

• Rural India: Persistent Vulnerability
  • Rural areas experienced sharper deterioration. By 2025, nearly 29 percent of rural households had slipped below their 2014 income rank.
  • The steepest fall occurred during 2014–19, with continued instability thereafter. Limited diversification, dependence on agriculture, and stress in the informal sector intensified rural fragility.
• Urban India: Relative Advantage, Limited Assurance
  • Urban households fared relatively better, with stronger upward mobility and slower increases in decline.
  • Yet downward mobility rose steadily even in cities. Gains were concentrated in specific sectors and regions, reinforcing regional disparities.
  • Urban advantage did not eliminate volatility; it merely moderated it.

Caste as a Structural Determinant of Mobility

• Downward mobility increased across all caste groups, with sharper rises among OBC and SC households.
• By 2025, roughly a quarter or more of these households were worse off than in 2014.
• Upward mobility improved for Unreserved groups and OBCs but remained limited for SC households, reflecting constrained social mobility and reduced access to asset ownership and quality education.
• Scheduled Tribes displayed comparatively lower downward mobility and occasional stronger upward gains, possibly linked to targeted interventions.

Religious Inequalities in Mobility

• Downward mobility rose among all major religious groups, with pronounced increases among Hindu and Muslim households.
• Upward mobility grew more steadily for Sikh and Christian households in earlier years, though momentum weakened later.
• Muslim households exhibited weaker upward mobility relative to Hindus, indicating barriers to economic ascent.
• The pattern reflects constraints rooted in discrimination, limited opportunity expansion, and uneven access to employment networks.

Political and Economic Turning Points and The Broader Implications

• Political and Economic Turning Points
  • The 2019 general election consolidated power for the Bharatiya Janata Party, marking a decisive political moment. Soon after, the COVID-19 crisis generated widespread humanitarian and economic disruption.
  • Prolonged stress in agriculture and informal employment weakened recovery, exposing limited policy responsiveness and gaps in social protection.
  • The absence of a coherent strategy to revive employment-intensive sectors slowed upward income shifts.
• The Broader Implications: Mobility and Social Stability
  • An economy where downward mobility outpaces upward movement risks eroding social stability. When inequality solidifies into reduced mobility, aspiration yields to frustration.
  • Visible affluence among a minority contrasts sharply with expanding precarity among vulnerable groups.
  • Static poverty metrics fail to capture this churn; mobility analysis reveals lived volatility and growing distributional stress.

Conclusion

• Between 2014 and 2025, India’s economic landscape combined expansion with regression. Downward mobility rose more sharply than upward mobility, particularly in rural areas and among historically marginalised communities.
• Caste, religion, geography, and local inequality continue to shape economic life chances.
• Sustainable progress requires strengthening public health, expanding employment-intensive growth, investing in education, and reinforcing social protection.
• Addressing discrimination is integral to restoring mobility and renewing faith in economic progress.
• Without reversing entrenched inequality, the promise of upward mobility will remain uneven, fragile, and uncertain.