Pandemic and the Crisis of Extreme Inequality in India

Abstract

The pandemic and the subsequent lockdown created a public health and humanitarian crisis for millions of workers and families in India. Through extensive data analyses of multiple nationally representative sample surveys, we argue that the effects of the pandemic and the associated lockdown have been exacerbated by the pre-existing crisis of extreme inequalities in the country. Multiple dimensions of inequality are explored, such as the disparities in the labour market and in the access to basic amenities. We briefly indicate our most striking findings. 63 percent of the workers and 53 percent of the households in India earned less than Rs 10,000 per month in 2018-19. Substantial gaps in earnings by gender, caste and area of residence persist – on average, female earnings was 63 percent of male earnings, SC earnings was 55 percent of non-ST/SC/OBC earnings and rural earnings was only half of urban earnings in 2018-19. About 905 million people did not have access to piped water, 287 million did not have access to toilets, 127 million lived in rented accommodations, and one-fourth of the population lived in single-room dwellings in 2017-18. The implications of the long-term neglect of the public healthcare system and the disparities in the access to education are discussed. In addition to inequality measures of monetary measures such as household earnings, we construct a multi-dimensional inequality index that combines indicators in housing, water and sanitation. This gives insights on the extent of inequality in non-monetary dimensions. The evidence in this paper clearly identifies that extreme multi-dimensional disparities and disadvantages lie at the heart of the current crisis in India and highlights the need to put redistribution at the centre stage of the development agenda.

Keywords: COVID-19, inequality, labour, earnings, multidimensional inequality, India

JEL Classification: J30, I14, I24, O15