Covid-19 and the disease of inequality -Yamini Aiyar

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published Published on May 27, 2021   modified Modified on May 28, 2021

-Hindustan Times

The second wave will deepen inequality. Expand support to states, universalise PDS, and ramp up MGNREGS now

Abandoned by the State that insisted on locking down, refusing to recognise the damage done to their livelihoods, India’s workers asserted their rights and made themselves heard by walking home in March 2020. The long march home was emblematic of the suffering and hardship unleashed by the first wave.

A year later, it is India’s broken health system and the suffering it has unleashed even on the most privileged that have dominated public imagination. Ironically, the scale of the health crisis has rendered invisible the deepening livelihood crisis that India confronts, drowning out the voices that fought a callous State and asserted their rights barely a year ago. It is a measure of how easily the State abandons its people that two months into the second wave, the looming livelihood crisis awaits acknowledgement by the government and relief, such as it is, remains sporadic and inadequate. The poor, long abandoned by India’s broken health system, is now being forced to suffer the indignity of abandoning their dead.

The second wave hit an economy that was showing signs of deepening structural inequality caused by Covid-19. The recently released State of Working India report by researchers at the Azim Premji University points out that 2020 saw a dramatic decrease in incomes for a majority of India’s workers. The cumulative income loss was higher among poorer households (27% for the bottom 10%). For the poor, the loss of income on a low base inevitably resulted in a significant cutback in consumption. A Hunger Watch survey points out that in October 2020, one in three respondents reported skipping meals “sometimes” or “often”, and 71% of households reported a worsening in the nutritional quality of their food intake.

The dynamics of India’s post-lockdown economic recovery pointed to a structural problem, which India failed to confront in 2020. The formal economy, notably large, saw listed firms benefitting through the pandemic at the cost of, as economist Pranjul Bhandari has pointed out, putting several small and informal firms that employ the bulk of India’s workers, in distress. This profit-led, jobless recovery saw formal salaried employees entering informal employment. Drawing on Centre for Monitoring Indian Economy (CMIE) data, the State of Working India report reveals that nearly half of India’s formal salaried workers moved into informal work, either as self-employed (30%), casual wage (10%) or informal salaried (9%) workers, in 2020.

The State, on its part, responded with a bare minimal relief. This did little to stem rising inequality. The limited fiscal stimulus and lack of income support arguably contributed to deepening inequality, even as it provided some succour against extreme hunger and starvation.

The second wave has brought with it a new set of challenges that will exacerbate inequality. First, because the Centre has abdicated all responsibility, state governments are charting their course. The result has been a medley of state-level lockdowns, with the burden of providing economic relief now solely on state governments.

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Hindustan Times, 27 May, 2021,

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