Despite the pandemic’s dark days, the country’s notable billionaires continued to thrive unabated. According to a Pew Research analysis, the pandemic has pushed 32 million Indians out of the middle class and increased India’s population of the poor by 75 million, while the Hurun Global Rich List claims that India has added 40 new billionaires in 2020. KRISHNA JHA highlights the growing social and economic disparities that are causing wider and deeper divisions in Indian society in the face of the COVID-19 pandemic.
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IN the deep shadows of the COVID-19 pandemic, the general public faces a divide, etched in blood. Following the acute scarcity and steep inflationary pressures on essentials, the vast majority of the population recognises that the flaws are inherent in the system itself and overcoming them necessitates a struggle with the fundamental foundation.
The French Revolution began in 1789 with a tax increase on loaves. The epoch-making change occurred only after misery and exploitation of the masses had reached a quantitative saturation point that was required for qualitative change. People were burdened with unprecedented tax hikes and rising prices, with no regard for other disruptions in agricultural production. They couldn’t take another blow and stood up to fight for justice, even though they were starving to death.
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The curious case of India’s dwindling middle class
As citizens struggle to make ends meet while coping with the pandemic, they recognise that the challenges cannot be addressed unless the socioeconomically deprived public band together as one entity.
The brutal deprivation that affects all segments of society except the rich and privileged, requires the cooperation and coordination of all intermediary groups.
The middle class has nearly merged with the poor, creating a stark contrast between the ‘haves’ and the ‘have nots’. While capitalism accommodates financial capital, society enters a new phase in which investment and production take a back seat to finance.
The current state of affairs is devastating for the poor and marginalised sections of society, where starvation, death, and debt have now become increasingly common. Banks are no longer perceived as accountable creditors. The practice of lending money at extremely high rates has resurfaced. The rate of interest is rising in sync with the rate of greed.
Unhappy, suffocating citizens in societal structures have nowhere to go, especially after the pandemic’s ruthless onslaught.
Inequality has always been on the rise, but at varying degrees relying on sources of income. According to reports, the economic front has surfaced at a terrifying point since the pandemic, along with an unprecedented rise in the stock market graph.
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The COVID-19 crisis threatens the Indian economy’s financial stability
According to the Boston Consulting Group, it is the rapid growth of money at a time when a large portion of production is declining, micro, small, and medium-sized businesses are failing, and the working-class is facing financial annihilation. The estimate corresponded to the compound annual growth rate for the five years preceding 2020.
On the contrary, household savings are now being eroded for those on the other side. The Ashoka University Center for Economic Data and Analysis studied the movement of gold, business, and real estate and discovered that there were quarterly changes every year as these were sold to meet the two ends.
According to Centre for Monitoring Indian Economy (CMIE) data, the observations for these three different categories reveal a steep decline because there is nothing to save them except family savings. Even before the pandemic, deprivation had already reached its peak between October and December of this year.
The ugly omens foretold that the economic recovery would be much more challenging, as the rate of income data had begun to fall, even in pre-pandemic months. The savings would be depleted and would never be replenished.
According to a study conducted by the Tata Institute of Social Sciences in Mumbai’s M East Ward, one of the city’s most impoverished areas, the average income of residents has dropped at an unprecedented rate of 47 per cent, or nearly half, and that’s only for those who are fortunate enough to have a steady job.
Also read: Govt Seeks Dilution of Inflation Targeting by RBI to Enable Economic Recovery from COVID-19
India’s unemployment rate is at an all-time high
On May 28, 2021, the urban unemployment rate had risen to 14.5 per cent, up from 7 per cent during the pandemic’s first wave and 12 per cent during the pandemic’s second wave. Self-employed people, such as roadside food stalls and small shop owners, drivers, and daily wagers, have also been severely impacted, with 12.5 percent of them unable to find work even after the financial sector reopened last year.
According to CMIE data, there is no new investment initiative. As a result of the previous quarter’s increase, investments fell by 13% in the June quarter.
In the midst of all of this, there has also been a wave of privatisation of public-sector units. Indeed, the public sector has been heavily impacted in this regard, as it has been subjected to a consistent process of disinvestment.
According to CMIE reports, rural unemployment was 10.63 per cent in May and 8.75 per cent in June.
The grim complexities of India’s income and wealth inequality
The upward trend was predicted by mobile indicators as well as power consumption. The National Rural Employment Guarantee Act (NREGA) is always a troubleshooter, as it was during the first wave of the pandemic’s aggression against migrant workers. The number of jobs created this time was the lowest in the previous three months.
During the pandemic, India added 40 billionaires to its list of rich and influential people. Gautam Adani is now Asia’s second-richest man and one of the world’s richest people.
But wait, there’s more. So far, this year’s Panama Papers have revealed Rs 20,000 crore in undeclared assets, with more to show up.
The cultural divide between sociodemographic sections of Indian society is widening, and the pandemic has exacerbated the economic disparity over time. (IPA Service)
