Brijendar Singh Panwar
In many countries, including India, COVID has led to sharp inequalities in income, wealth and gender as the economy has ebbed
Both phases of the COVID-19 pandemic have been a learning experience, on a global scale. Calamity turned out to be a greater leveler. Whether king or poor, living in rural or urban areas, educated or not, it has affected the lives and lifestyles of everyone, making us face unexpected and unheard of things.
According to a 2021 Oxfam report, this is a global trend. A survey of 295 economists from 79 countries found that most of them were convinced that the COVID-19 crisis would lead to severe inequalities in terms of income, wealth and gender. For example, 87% of economists predicted that “income inequalities in their country would increase or increase sharply”. The prediction has been found to be true in many countries, including India.
For the first time in four decades, India’s economy – already on the slope even before the pandemic – hit a tide in 2020-21. CMIE data indicates that more than 10 million Indians lost their jobs during the second wave and 97% of households experienced a loss of income and experienced a decline in real incomes, adjusted for inflation, in the over the past year. The remaining three percent included either the super rich or the miserable poor. The former have sources that generate income even during shutdowns and the poorest have no room for another fall.
The situation can be best explained with the help of various other surveys carried out by independent organizations. The 339,065 deaths from COVID in the past 14 months have dealt a double blow to public health and the prospects for economic recovery. The sectors most affected were infrastructure, manufacturing, construction and services which provided maximum employment.
Experts say that although most families have been affected by declining incomes, inequality between the haves and have-nots has widened. This disparity is proven by data from the CMIE which indicates that while 99.3% of Indian households that earned less than Rs 1 lakh per year were affected, the losses upset only 77.6% of those who earned more. of Rs 10 lakh. Over a fifth of the rich have not only been successful in protecting their incomes, but have also seen their overall wealth increase. According to the Knight Frank Wealth Report 2021, 60% of India’s “ultra rich” saw their individual income increase in 2020, and 91% of them expect their net worth to increase further in 2021. At l At present, the number of Very Wealthy Individuals in India is 6,884, as well as $ 113 billion and this figure is expected to increase by 63% between 2020 and 2025.
Another list, Harun Global Rich List, 2021, revealed that India moved to third place with $ 177 billionaires, 40 more than last year. Among them, 150 got richer and included 50 new faces. Established companies such as Mukesh Ambani, Gautam Adani, Shiv Nadar, Kumar Mangalam Birla, Pankaj Munjal and others have been the main beneficiaries. Mumbai was home to $ 61 billionaires, followed by Delhi (40).
According to the RBI 2021 annual report, private consumption, at minus 9% in 2020-2021, “registered a contraction for the first time in the past four decades.” Public consumption fell sharply, from 7.9% in 2019-20 to 2.9% in 2020-2021. ONS estimates in February 2021 indicated that “aggregate demand, as measured by real GDP, has contracted by eight percent” in 2020-2021.
It is the most severe contraction felt since 1980-81. On the flip side, it was surprising to notice in the RBI’s May 2021 Consumer Confidence Survey that 50.6% of those polled said their overall spending had increased. The survey results attributed it to two factors: an increase in general inflation and prices and the difference between what consumers spend on essentials: food, fuel and education and products. non-essentials such as travel and entertainment. The RBI’s annual report said that despite COVID and lockdowns, or because of them, over the past year, inflation has raised its ugly head. Inflation in 2021 was the highest since 2013-14 and was largely fueled by rising prices for essential commodities such as food and beverages, fuels, gasoline, diesel and gas. food.
This unprecedented situation has a direct impact on the government. Despite the economic stimulus and measures taken to curb inflation, there was little the government could do to revive the economy. The reflection of post-pandemic distress is clearly visible.
No one can deny that the Modi government has done an honorable job of providing social benefits, but 46 percent of people believe its economic policies have mainly benefited big business. For the first time in five years, the volatile state of the economy has started to darken government ratings. While 71% of those polled had qualified the government’s management of the economy as “excellent” or “good” in August 2019, only 47% believe that is the case now; 20% consider its management of the economy “bad / very bad”. Polls warn the ruling party would not win 272 seats if Lok Sabha’s polls take place today. It is therefore a warning signal for the party in power.
(The author is a senior journalist and chairman of the Panwar Group of Institutions, Solan, Himachal Pradesh. The opinions expressed are personal.)