How the pandemic has worsened inequality in India

News: Inequality in India is rising. Covid has exacerbated the issue.

What are the latest findings?

The latest edition of the World Inequality Report shows that the top 10% earn 57% of national income, and within that top 1% earns 22% while the bottom 50% earn only 13% of the income. This deeply impacts social mobility. This has also translated to inequalities in education and the labour market.

What trends emerge from labour market analysis?

Since the onset of the pandemic, there has been a decline in labour force participation. This means that despite a young population, the number of people looking for jobs has fallen.

Second, over the same period, the unemployment rate has risen from 7.5% to 8.6%. So among those looking for jobs, those unable to find jobs, even at lower wages have risen.

Third, among those in jobs, the casualization of labour has increased.

How does inequality affect social mobility?

Rapid growth lowers the obstacles to mobility. But subdued or uneven growth leads to disproportionate benefits to richer people. For instance, there will be disparities in consumption, income, and wealth.

According to ASER Report, the learning gaps between children from poor and affluent households will widen with inequality.

This will lead to greater demand for redistribution. Thus, this scenario needs to be arrested for better social mobility.

Source: This post is based on the article “How the pandemic has worsened inequality in India” published in Indian Express on 13th December 2021.