The New York Times writes about China, but it is equally applicable in the Indian context:
China has the world’s fastest-growing economy but is one of its most unequal societies. The benefits of growth have been bestowed mainly on urban residents and government and party officials. In the past five years, the income divide between the urban rich and the rural poor has widened so sharply that some studies now compare China’s social cleavage unfavorably with Africa’s poorest nations.
For the Communist leaders whose main claim to legitimacy is creating prosperity, the skewed distribution of wealth has already begun to alienate the country’s 750 million peasants, historically a bellwether of stability.
The countryside simmers with unrest. Farmers flock to the cities to find work. The poor demand social, economic and political benefits that the Communist Party has been reluctant to deliver.
In recent years, officials have devoted the nation’s wealth to building urban manufacturing and financial centers, often ignoring peasants. Farmers cannot own the land they work and are often left with nothing when the government seizes their fields for factories or malls. Many cannot afford basic services, like high school.
This year, the number of destitute poor, which China classifies as those earning less than $75 a year, increased for the first time in 25 years. The government estimates that the number of people in this lowest stratum grew by 800,000, to 85 million people, even as the economy grew by a robust 9 percent.
No modern country has become prosperous without allowing some people to get rich first. The problem for China is not just that the urban elite now drive BMW’s, while many farmers are lucky to eat meat once a week. The problem is that the gap has widened partly because the government enforces a two-class system, denying peasants the medical, pension and welfare benefits that many urban residents have, while often even denying them the right to become urban residents.