Why India Must Rethink the Valuation of Skills and Productive Work

Gist Despite being celebrated as one of the world's fastest-growing economies, India is drifting toward a middle-income trap characterised by jobless growth, low productivity, and stagnant wages. This economic stagnation is rooted in deep-seated social norms—particularly caste-based occupational stratification—that chronically undervalue manual labour and vocational skills while subsidising elite, abstract education. For a civil services aspirant, understanding this dynamic is crucial because it explains why standard free-market reforms and traditional state welfare policies continually fail to generate mass productive employment. Background The Middle-Income Trap refers to a situation where a developing country exhausts the initial economic gains of cheap labour and rapid technological catch-up, but fails to transition into an innovation-driven, high-productivity economy. The traditional economic debate in India has been binary: pro-market economists advocate for deregulation, agricultural reform, and labour flexibility echoing the 1991 economic reforms , while Keynesian economists argue for higher public spending and redistribution to boost aggregate demand. However, both models assume that the State and market operate in a vacuum; in reality, they are shaped by historical social institutions and cultural norms that dictate how…