By Krishna Jha
India has entered one of its darkest phases of deprivation when the annual income of the poorest 20 percent has fallen by 53 percent and still continues to fall from the level of 2015-16. Since last three decades, economy was evolving at the rate of seven percent a year and was going up constantly till the advent of the pandemic years. Per capita income before the Pandemic days had arrived at 2100 dollars a year. It was in the same years that the richest twenty percent were reaping an income growth of 39 percent. It was the result of the Covid days that had impacted the economy splitting the population in a perfect contrast of Haves and Have Nots.
The survey conducted by People’s Research on India’s Consumer Economy, between April and October 2021, had taken up 200,000 households in the first round and 42,000 households in the second round, spreading it over 120 towns and 800 villages across 100 districts.
As the economic activity has been declining to almost zero level, especially in the months of 2020-2021, and caused GDP to contract up to 7.3 percent, the urban poor was also affected hugely as their household income was receding steeply.
With erosion, there was also the sharp categorisation, though with very little difference among them except with the top twenty percent. Among the poorest 20 percent, it was the most brutal erosion of 53 percent, for the second lowest, usually called lower middle category, the decline in their household income came down to 32percent.
In the middle income category, the decline was found to be of nine percent, while for the upper middle category, it was a rise of seven percent. It also faced decline but it was only nine percent, and then the rise. It was the richest twenty percent that registered the highest rise among the entire population. It rose to 39 percent, when the famine and joblessness had caused big masses to migrate towards their roots.
The survey also brought out the fact that the richest twenty percent had earned more in the post liberalisation years including the days of pandemic. In contrast to it, for the most impoverished twenty percent households, especially during and after 2021, their income saw a sharp fall of more than half of what they were getting in 2016.
In the last eleven years before pre Covid days, between 2005- 2016, the household income for the top rich went up from 20 percent to 34 percent, for the poorest 20 percent, it also saw a hike in the average income growth rate of 9.9 percent. Now in 2021, the share of the poorest 20 percent has dropped to 3.3 percent in the same period.
The survey showed that in contrast to those poorest, the richest 20 percent accounted for a jump of 56.3 percent in 2021.
As with pandemic, economy was getting more formalised, and big companies in the top twenty percent benefitted at the cost of smaller ones. The survey brought in the light the fact that while job losses were almost all pervading among small and medium enterprises in the casual labour segment, large companies did not suffer much on this account.
It is also noted that there has been a difference in impact between urban and rural regions. Those poorest 20 per cent in urban areas got more impacted than their rural counterparts since Covid and the lockdown. They have been facing a worsening curb in economic activities in urban areas. This resulted in job losses and loss of income for the casual labour, petty traders and household workers.
The miseries of people in the country caused by the economic policies that have been supportive to the highest twenty, were not thought of worthy to be taken into account. The ruling regime, joining hands with the rule of finance capital, has been reluctant to even list the disastrous consequences of such policies that have brought decline in per capita income of the major section of people, who already suffer from rise in malnutrition, that causes stunting and wasting among children, slipping down to the rank of 94 out of 116countries in the Global Hunger Index.
In addition, demonetisation has pushed the country to the brinks. Millions of people have been pushed into a state of acute impoverishment. Then there are the MSME who have hardly any support from the system. With chaotic management of the pandemic, there is also refusal to transfer cash to the poor. Then there is growing unemployment, coming down to 7.2 percent, with urban 8.4 and rural 6.4 percent. Also high inflation rate, CPI 5.6 percent, high indirect taxes, indulgent direct taxes; poorly designed GST; profiteering in sale of petrol, diesel and LPG; return of the licence-permit regime; concentration of capital and wealth and finally strengthening of the monopolies; crony capitalism.
In these grim days, masses are going through little less than famine times. They are paying back the prices for all decisions that the system is taking. But soon it would be the system that would be made to bear the prices for everything. (IPA Service)