Washington: Noting that the ongoing assembly elections in India reflects its thriving democracy, US Ambassador-designate Nancy Powell has said that the country still has enormous societal inequalities based on historic caste systems of economic differences.

"I think India's democracy is a thriving one...right now they are engaged in five states voting, with over 200 million residents in one of the states," Powell told Senate Foreign Relations Committee on Tuesday.

"So that part of the democracy in terms of its forms and norms are well established. They are voting after a very vigorous debate over policies, and particularly in these five states of looking at the economic reforms, whether they have answered the question that we would ask here in the United States are you better off than you were at the last election," Powell said referring to the ongoing assembly elections in India.

Pointing that India has enormous societal inequalities based on historic caste systems of economic differences, she said: "I take a lesson from my time as a teacher of American government and American history; of reminding me that our Constitution starts with the words about forming a more perfect union.

"I think that India is in the process of doing that as well. It has enormous societal inequalities based on historic caste systems of economic differences," Powell said.

"But surely one of the engines that moves a society is the commitment to democracy, a ballot box that allows people to vote for their leaders and to vote for change, but also a rising economy," she said.

She also said that though Indian has made an enormous progress in the field of economy, the country is still not a red-tape-free society.

"I contrast my earlier time in India where they were just emerging from a very, very closed economic system, one which required enormous amounts of work to start a business – or to close one for that matter with the current system.

"It's not perfect yet, it still takes a long time in India. It's still not a red-tape-free society, but all those things are freeing up India," Powell said.

"I think we have seen over the 20 years of economic reforms a tremendous number of people who have been removed from absolute poverty.

"They're into the Indian middle class now. They are able to afford education for their children. They are dedicated to that as one of the first things that they use their disposable income for. But also a rising consumer network, better housing," she said.