Abstract
The paper examines the relationship between income inequality and economic growth in Bangladesh, focusing on urban-rural disparities, sectoral changes, and policy interventions. It assumes an inverted U-shaped relation between inequality and growth while debating the Kuznets Curve and the role of human capital in mitigating inequalities. The paper finds that while inequality may stimulate industrial growth in urban areas, rural areas face barriers to access to capital, education, and infrastructure resources. This restricts rural economies’ participation and widens inequality. The Gini coefficient has increased from 0.33 in 1991 to 0.49 in 2020, indicating that urban-based inequality is related to industrial growth, but benefits are not realized equally. By reviewing a total of 30 studies to analyze the relationship, this paper calls for a multidimensional policy approach that addresses disparities, improves infrastructure, and fosters inclusive growth through investments in education, technology, and financial inclusion. Further research should be undertaken on how climate change, digital transformation, and sector-specific policies may impact the economy in terms of inequality and sustainable growth