“It's is the only proven system which can lift us out of poverty" says Kunal Shah urging Indian podcasters to teach capitalism & socialism

India’s shift from strict government control to market-friendly reforms in 1991 changed the way the country grows and creates jobs. 

Today, founders, economists, and content creators are debating how capitalism and socialism affect wealth, innovation, and poverty. 

Kunal Shah recently urged Indian podcasters in all languages to teach the public about these systems, saying it is crucial for people to understand how economic policies shape their lives.

Kunal Shah on Capitalism: Lessons from India’s Economic Shift

CRED founder Kunal Shah recently wrote,“Capitalism has its flaws, but it’s the only proven system which can lift us out of poverty and make a nation worth reckoning.”

Shah’s statement captures the essence of India’s post-1991 story. He specifically called on podcasters to explain the merits and limits of capitalism and socialism to everyday people, highlighting that understanding these systems is not just academic—it affects livelihoods, innovation, and wealth creation.

The liberalization reforms reduced licensing requirements, allowed private companies more freedom, and opened the economy to foreign investment. Growth picked up quickly—GDP rose to 6–7% on average, with peaks above 8%. Extreme poverty fell from 22.5% in 2011 to 10.2% in 2019, lifting hundreds of millions out of deprivation.

Services like IT, finance, and telecom became major growth drivers, contributing around 60% of GDP. Construction and manufacturing created jobs in cities and towns. Foreign Direct Investment reached $81 billion in 2024, fueling new businesses and startups such as Zerodha, Ather Energy, and CRED. 

Shah’s point is that market-driven growth creates opportunities that a purely state-controlled system could not—but people need to understand how and why these opportunities exist, which is why his call to podcasters is important.

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India Before 1991: Socialism and Slow Growth

Before liberalization, India followed a socialist-style economy. The government controlled most industries, limited private businesses, and required licenses for almost every decision. GDP grew only 3–4% per year, poverty stayed high at nearly 50%, and job creation lagged behind population growth.

While the system aimed to reduce inequality and provide welfare, it failed to generate enough wealth or opportunities. Companies struggled globally, exports remained low, and innovation was limited.

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Why Understanding Both Systems Matters Today

The post-1991 reforms accelerated growth and startups, but they also increased inequality. Welfare programs like MGNREGA remain important to support low-income households. 

Shah’s call to podcasters emphasizes that understanding capitalism and socialism helps people make informed choices—whether about economic policies, startups, or personal finances. 

India’s experience shows that markets can drive wealth and innovation, but combining them with social support ensures more people benefit.

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