Connecting Regions of Asia.

INEQUALITIES – THE UGLY ECONOMIC TRUTH OF INDIA

10

The rich are richer, the poor hungrier
Yesterday, the headlines screamed about China becoming the world’s wealthiest country. There was another headline, it was about its southern neighbour, India. About five-and-half million people lost their jobs in India in October. The four big IT companies in the country plan to hire around 1,20,000 employees combined in this fiscal year. Total IT industry hiring would cross a quarter million. Contrastingly the ranks of those not actively looking for employment rose to 16 million in  from ~15 million October 2021 – they don’t have the skills for the new economy.
7 MILLION LOSE JOBS IN THE LOCKDOWN
Flashback to the abrupt lockdown a year ago, about 182 million people were either looking for jobs or had a job in the quarter just before the lockdown. However, about 7 million withdrew from the labour force during the lockdown period – this is the truth about India; a country of stark inequalities.
MILLIONS EARN SALARIES OF OVER RS 1 CRORE A YEAR
Attrition is at an all time high in the information technology sector. Companies are hiriing millions of freshers and salaries of the skilled are reaching astronomical figures. Millions are in now in the Rs 1-crore annual salary bracket. They are ones with the digital skills, they are the ones who are buying houses, cars, and investing in the stock markets propelling it to dizzying heights. Residential property prrices in Bangalore have increased by 8% bucking a slump. 
…BUT MIDDLE CLASS SHRINKS
A Pew Research Center analysis finds that the middle class in India is estimated to have shrunk by 32 million in 2020 as a consequence of the downturn, compared with the number it may have reached absent the pandemic. This accounts for 60% of the global retreat in the number of people in the middle-income tier (defined here as people with incomes of $10.01-$20 a day). They are hit by a double whammy – declining incomes, and rising cost of living.
…AND THE POOR GOES HUNGRY 
The number of people who are poor in India (with incomes of $2 or less a day) is estimated to have increased by 75 million because of the COVID-19 recession. Households have lost a whopping Rs 13 lakh crore of their incomes from the pandemic-induced job losses. This is reflected in India’s terrible performance in the Hunger Index – more people are hungry. 
>300 MILLION CHILDREN DROPOUT OF SCHOOLS
Perhaps even worse than the income & wealth ineqaulity, is the dropout of over 300 million children from the education system during the pandemic. They dropped out because they did not have devices to log to online classes, even if they managed a tablet or a smart phone, they did not have money to spend on higher bandwidth. These children will never return to their classes. They will never have the digital skills to even qualify for the new jobs being created. This is the education inequality that India has created in the last two years, and no government has any idea how to act on it.
GDP DOESN’T SHOW THE REAL PROBLEM – INEQUALITY
India’s GDP growth will biased with the incomes of the wealthy who have become wealthier during the pandemic, our capital markets with their indices skewed with IT stocks, will soar even higher, our politicians will brag about these numbers, and we will ignore the millions, the largest swathe of our population who will left out of this glittering picture. Real economic progress will happen only when we work to remove inequalities; GDP will never reflect the truth of India.

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