Piketty says India must boost education, health and infrastructure to avoid middle-income trap

Thomas Piketty, a French economist specializing in inequality, told PTI that India can avoid the middle-income trap only by committing substantial resources to education, healthcare and infrastructure, and by engaging in wide-ranging global coalitions that support inclusive development. He explained that the trap occurs when rising wages erode competitiveness in low-skill manufacturing while productivity lags in higher-value sectors, leading to sluggish growth.

Piketty warned that one outlet focus on artificial intelligence diverts attention from the urgent need to reduce material footprints and shift to low-carbon economies, especially in a country as populous as India. Referring to the World Development Report 2024, he noted that many middle-income economies fail to move beyond moderate growth because early-stage drivers lose effectiveness. He also highlighted UNESCO’s 2026 SDG 4 data showing India’s education spending has stalled at 4.1 % of GDP and its share of public expenditure has fallen. Finally, he called for India to join international efforts on wealth tax and climate reparations to shape a sustainable development model.