It's a paradox.

"Going by projections by global agencies, India is on course to surpass its 2003-2007 record of five consecutive years of 7% or higher growth, Kyunghoon Kim of Korea Institute for International Economic Policy said." "Following a 5.8% contraction during the pandemic, India's economy rebounded sharply by 9.7% in 2021 and has sustained growth exceeding 7% in each succeeding year." TOI. A report by the Union Bank of India "highlighted that India's outstanding private capex pipeline reached Rs 99.7 trillion in September 2026, nearly 4.1 times its March 2014 level and 39% higher than a year ago." "The report cautioned that project announcements could outpace actual executions." ET. "Even as the conventional tax-paying middle class in India feels economically crushed, the number of individuals declaring an income of more than Rs 10 million has risen about eight-fold in the last 12 years to 324,000." "Taxpayers earning Rs 500,000 to Rs 10 million...saw their average income move from Rs 1.023 million in 2012-13 to just Rs 1.069 million in 2023-24," while "Consumer prices rose about 80% between FY13 and FY24." Which means they are earning 42% less in real terms. "In FY13 rupees, the Rs 1.069 million earned in FY24 buys what Rs 595,000 did then," wrote Nandita Rajhansa & Suarabh Mukherjee. "The 'octopus class', according to Mukherjee and Rajhansa, comprises nearly 200,000 families across India, in small towns as well as big cities, or nearly 1 million people, who control nearly 80% of India's wealth." "A town with less than 0.5 million people will have 20 such families," while "A city with 1 million people will have 50 such families." ET. The study does not tell us what proportion of this 'octopus class' are 'Bahubalis' (strongmen) (pgurus.com) who enjoy political protection. Political scientist Milan Vaishnaw has studied why Indians vote for criminals. He found that a candidate with a criminal record "had an 18% chance of winning their next election whereas the 'clean' candidates had only a 6% chance." Criminals can force a callous and corrupt civil service to deliver services which people want. BBC. "Investment in the Indian Economy as reflected by GFCF (gross fixed capital formation) recorded a strong growth of 11.9% in the first quarter of 2026-27." "The Centre's capex has grown by 30% in the first four months of the current fiscal year." "Investment by India's private non-financial sector (with 30% of the total investment) grew by 7% in 2024-25, jumping from 3% growth recorded the previous year," wrote Rajani Sinha. "Note that India's corporate capex has been stable at 14-15% of GDP in the past decade, lower than 17-18% in the post-2008 period and its peak of 21% in 2007-08." "India's total investment-to-GDP ratio has averaged 33% in recent years. Not only is this better than about 30% in the pre-pandemic period, but also only second to China's 40% among the world's major economies," wrote Nikhil Gupta. The private sector will increase investment only if they are sure of making profits, but India's middle class is not growing. Outside the 1 million octopus class are 800 million people who survive on free food grains for five years from 1 January 2024 (pib.gov.in). "Between the bookends of wealth and wages lies the problematic problem: work and wage," wrote Andy Mukherjee. "A stunted middle class may be a direct result of this extreme inequality. Folks at the top of the ladder don't see the teeming masses as a meaningful market, except for utilities, soap, short videos, and personal loans. Meanwhile, those at the bottom of the pyramid lack the education and skills to manufacture things for the wealthy at home and overseas." Enforced gig work does not create a middle class. "A total of 64.3% of India's population, which represents over 940 million people, are now covered by at least one social protection benefit," boasted Labour and Employment Minister Mansukh Mandaviya. TNIE. If the gross domestic product (GDP) is growing at over 7% and government and private investment are growing it should mean production is increasing. With 940 million on some sort of social benefit demand should be muted, but the RBI is signaling more rate hikes due to higher inflation (Reuters). How can prices increase if demand is low while production is high. The great Indian paradox. Could someone please explain.