How has pandemic increased inequality in India?. What should the government do to address deepening inequality?
The wide differences visible between the income of the richest and poorest Indian shows the magnitude of income inequality. Many reports have highlighted that income of poor sections declined during pandemic whereas the rich increased their wealth.
Reasons for income inequality
- Loss of informal sector jobs
Many jobs in informal sector of economy have been lost due to the pandemic induced lockdown. This includes construction, tourism, restaurants etc.
- Inflation
The retail and wholesale inflations have been growing. The prices of commodities are increasing due to rise in fuel prices. The income of poor sections is exhausting fast.
- Non equal opportunities
Many poor sections do not have equal opportunity to resources to improve their lives and income. This includes education, health, banking etc.
- Social situation
The stigma associated with castes still exists in rural areas. Many individuals are unable to break the caste barrier and pursue jobs that will take them out of poverty.
Neutralizing inequality
- Wealth tax
There have been proposals previously to impose wealth tax on the richest individuals of the country. The amount collected could be used to provide resources to larger public.
- Subsidies for poor
Many costly commodities such as fuel, education, healthcare, accommodation etc can be subsidized. This will ensure that families have more money left for spending.
Thus, income inequality needs to be tackled faster if India aspires to reach $5 trillion in terms of GDP. The role of government is critical in case this has to happen.
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