America has a wealth gap due to corporatism not capitalism. Democratic socialism entails more government. More government means more regulations and more regulations means that SMEs won't be able to compete as they don't have to resources to stick to the regulations. This leads to more power in the hands of big corporations and thereby more wealth in the hands of the few.

Even if you ignore the cause of wealth gap, you cannot deny that even the poor in America have comparable living standards to the middle class here in India. It is also not a surprise that most of the so called capitalistic countries have a higher HDI than the socialist ones. You can cite the example of scandinavian countries but truth is these countries started to prosper only when when started adopting free market policies in the late 1990s. These countries have high taxes but quite a free market nonetheless.

Thus, capitalism > socialism. Our own experience pre and post 1991 prove this. Not to mention the fact that we are able to debate and discuss this issue because of capitalism(computer -> reddit). Ethically speaking, socialism(democratic) or otherwise simply means that you punish hard work(taxes) and reward failure(distribution).

This step by Narendra Modi is correct. Free enterprise should be free to do what they want with labour. We need to cut down on regulations that exist for setting up enterprises. My friend runs a restaurant and there 26 rules that he needs to comply and he needs to bribe around 7-8 different officers. Less rules = less corruption. Less rules = easy business = more jobs = better economy.

Capitalism development is not a rhetoric. It has worked for the west.