Covid has not been an economic leveller even though it is considered to be a social leveller. High or the low, weak or the mighty in terms of social status have not been spared by the disease but it has created greater inequality between income earners.
1)Better paid white-collar workers are Working From Home whereas low paid blue-collars have no privilege like this and many have them have been laid off.
2)Higher level of low paid workers are in areas like Nursing, cleaning, policing, teaching, garbage removal and store or delivery attendants where they are more likely to come out with more touches with those who are infected;
3)low paid workers in hotels, restaurants and tourism & hospitality sectors have been severely affected without jobs.
4)richer countries have bailed out their small businesses by pumping more liquidity into areas that are suffering but smaller and weaker countries have no adequate finances and therefore have not been able to protect the small businesses from going down the drain . This has only further exacerbated the gap between the rich and the poor countries.
5) lack of adequate vaccination facilities and medicines in the poor countries have pushed them into the harsher pandemic status and prolonged lockdown situations which have only multiplied their economic woes leading to an increase in poverty.
6) Easy liquidity conditions laid out by Central banks/Federal Reserve have only boosted stock market-based income further exacerbating the income gap between the rich and the poor.
The above problems are universal and all countries have faced this predicament.
India too is not an exception. But the govt of the day has initiated well-targeted efforts to revive the economy. This is an investment led push which the govt has paved the way with its ProductionLinked Incentives schemes, Credit Guaranteed loans and other MSME support measures, apart from the Capital intensive infrastructure investment undertaken by the Govt. The marginalised in the rural areas have been supported by MNREGA employment income scheme to provide them a cushion against this debilitating pandemic shock.
The first quarter GDP (Q1-Fy 21-22) at 20%+ is heartening to note as this will bring back jobs and employment to the economy.These are still early days and as WEF reported , every 3 out of 4 in most countries including India have had a decline in their household income and reclaiming the lost ground would take few more quarters of sustained growth.
It is anybody's guess as to when people will start having sufficient discretionary income to go for consumption led growth. Government has to initiate certain enabling ground for this by deepening the reforms like bringing down GST rates, streamline Court judicial and legal processes etc.
If the third wave does not create scare and panic, India can look forward to this as early as in second or third quarter of FY22-23 with the demographic dividend coming to its aid.
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