24 JAN,2021 | MEDC
Covid is shining an unsettling spotlight on several socioeconomic inequalities in India, showing how pervasive they are and how they put the nation at risk for other systemic shocks. These fundamental inequalities will need to be addressed sooner or later, if we are to put the pandemic behind us and emerge successfully from a battered economy. If we fail to do so, not only is a slow economic recovery almost guaranteed, but the probability also rises that the next black swan event will arise sooner than expected and hit the bottom of the pyramid harder than expected. The economy is now at the beginning of a recovery, but it is obvious that not all Indians are experiencing that recovery in the same way. The top 1% are emerging as strong as ever in terms of their wealth, while it is the working and middle class families which are hit the hardest. If the forthcoming budget does not address this fact squarely, we risk damaging our social fabric irreparably. Policymakers now have an opportunity to address these inequalities with transformative changes to produce a healthier and more resilient economy delivering inclusive and sustainable growth. Workers and their families on the wrong side of the many socioeconomic inequalities in India are there for several reasons – one of which surely is a stubborn reliance by policymakers on markets to do the work of government. The supposedly neutral and fair rules that govern markets have subtly shifted risk away from corporations and the top of the pyramid towards the middle and lower-middle class. This was particularly exposed in the pandemic, when mostly low-income workers either lost their jobs or were forced to take employment in areas exposing them to the risk of contracting and spreading the contagion. These issues are largely the result of decades of botched policies supported more by ideology than by evidence. A distorted economic narrative that lionizes markets at the cost of public institutions, has been unable todo adequate justice to the socioeconomically marginalized. The greater the economic concentration, the lesser is the power of the working class in any kind of bilateral or multilateral negotiation. Indian society being what it is, a certain amount of government intervention in the economy still remains indispensable. At this stage of India’s economic recovery, our topmost priority should be to eradicate Covid through a systematically planned vaccination programme. Beyond that, policy should encourage a strong and sustained recovery that delivers inclusive growth and addresses the core issues highlighted by the pandemic – a costly healthcare system with inadequate infrastructure, an education system which exacerbates the digital divide, and a hanging threat of unemployment for many families. All these perpetuate India’s widening socioeconomic inequality, and need to be suitably addressed by policymakers.
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