Consequences of Pandemic: Decline of inequality and rise in poverty

• Image Credit: Internet

• Jan 4, 2022 | moderator

Digital Desk: The latest study by the US revealed that millions of Indians Millions were forced into poverty throughout the Covid-19 pandemic period. The period post the initial strict lockdown also saw a decline in income inequality in the nation, said a working paper published last month.

The paper titled 'Inequality in India declined during Covid,' published by the National Bureau of Economic Research (NBER), a US-based non-profit that concentrates on conducting and disseminating economics analysis, conveyed the pandemic in India was linked with a decrease in inequality in two senses.

The first was that Indians from higher income levels had larger comparable declines in income than the poor. Tthe second was that consumption inequality also dropped.

The non-peer-reviewed analysis was led by three scholars — Arpit Gupta from the Stern School of Business, University of New York, and Anup Malani and Bartosz Woda from the University of Chicago Law School.

The pandemic has not just hit the poor category of the nation. But, the impact of Covid 19 could be seen among the rich category. The rich people of the nation become poor due to a fall in demand in the market and business spectrum.

However, other study reports like Oxfam International asserted that in 2021 India's top 1 percent possessed about 77 percent of the country's wealth. So now, this becomes an issue for the poor people of the nation as they miss out on most of the privileges provided by the government.

Also Read: Captain Harpreet Chandi becomes first Indian-origin woman to trek solo to South Pole

Income inequality is the intermediate gap between the earnings of the rich and the poor. This 'inequality' drops if the incomes of the rich fall or if the incomes of the poor rise.

In India's case, there was possibly no chance for the poor people to have extra earnings due to the lock down. However, the rich people could fall for income due to lockdown and other market limitations due to the pandemic.

This study indicates that India's decline in income inequality could be attributed to gains of upper-income families dropping throughout the pandemic.

The study further revealed an increase in poverty in India due to the pandemic. So now, there lies the question of what should be the government's main objective concerning the economy that is dropping.