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Home >Opinion >Columns >Will the finance minister address the issue of rising inequality in India?

The saying goes, buy when there’s blood in the streets. Those who are street-smart have been using it in times of epidemics, war or other such disasters. Covid-19 once again brought a golden opportunity for such people. During this period, while this ferocious tragedy broke on the middle and the poor globally, the rich became richer. India is also no exception.

Let’s start with the US, considered as the strongest economy in the world. Surprisingly, during the pandemic, the wealth of the top 20% rich people increased by leaps and bounds. Holdings of the owners of Amazon and Tesla together reached close to $1 trillion. It even favoured those who earn over $1 million annually.

In March 2020, when former US President Donald Trump declared a state of emergency following the covid-19 outbreak, it was considered a way to manage the calamity, but also brought new opportunities for the 614 billionaires. Their total networth rose by $931 billion over the next seven months. Besides, the employment rate of the 25% population with the highest income increased by 1.6% over the pre-pandemic times.

While the wealth rained on the billionaires, the economic condition of the poor was deteriorating. Some were being killed by the pandemic, while most were suffering from other disasters caused by the pandemic. By December, 10 million US citizens had lost their jobs, while numerous small businessmen had been deprived of their businesses forever. There is still a huge 21% decline in the employment rate.

This plight is not just for the American poor. The New Policy Institute estimated in June 2020 that the top 20% of British super-rich had earned $29.3 billion during the lockdown. Back then, the common man did not even have enough money to buy grocery or to pay electricity bills. In India, the wealth of seven billionaires increased by $64 billion in 2020. A report by World Inequality Slab, released in November, tells us that between 1980 and 2019, the top 10% of the rich in India increased from 30% to 56%. The income of the top 11 billionaires of the country has grown so much that the entire needy population in India can be vaccinated with this money, or it can be used to fund schemes such as MNREGA for the next 10 years—a scheme that feeds millions of people in rural areas.

Some economists are now advocating taxing the extra income of the super-rich. But is this possible?

During the covid-19 crisis, there was a 12% decrease in income of organized sector employees. An average Indian lost his earning by 17% during this period. According to a Oxfam survey, women have been the worst victims. Their unemployment rate registered a 15% increase. Will the finance minister take care of it in the budget on Monday? This is the class, which had to bear the brunt of painful sufferings. Jobs were gone, shelters were lost and when they reached their home after walking hundreds of kilometres, instead of their loved ones, the disparagement was waiting for them. These destitute people are most in need of support from the government.

Even ‘communist’ China was no different—the income of those sitting on the high reaches of the economic boom grew from 28% to 41%. It clearly shows that economic inequality is increasing all over the world and, unfortunately, there is no scope for immediate improvement since the pandemic continues to wreak havoc. The vaccine is now available but new strains of the virus are emerging, making it difficult to predict when the world will be free from this disaster. It might take a long time for the economy to regain its momentum. However, even in pre-pandemic times, many countries like India witnessed economic slowdown. This is not a piece of good news for the democratic world.

History shows that long-term economic inequalities sow the seeds of dissatisfaction, which leads to mistrust, and this often forces the common man to hit the streets. We have seen the so-called farmers’ fury on the streets, despite the government giving clear signals to take a few steps backwards, but the agitators were not ready for anything less than the withdrawal of the three controversial farm laws. They are on the road for more than two months. More and more tension was spreading day by day, which culminated in the violence on 26 January. Some captured the Red Fort and hoisted a religious flag. The dignity of the Indian Republic had never suffered such a setback before, which shattered the morale of the peasants and tarnished the credibility of their struggle. Efforts are being made to save it.

A few days ago, we had seen heartbreaking scenes of the US Congress. It seems that the common man is losing its trust with their elected governments and the systems which have been in place for years, in democracies. A number of incidents of the last decade are witness to this.

Many thinkers are calling this trend a threat to the democratic system. Would those who are occupying the seat of power try to find a solution to this? In India, today is the day when we can begin it. Some pleasant signs can be expected from finance minister Nirmala Sitharaman’s third budget.

Shashi Shekhar is editor-in-chief, Hindustan. The views expressed are personal

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