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THE GROWING GAP
What the article is about?
- In the light of the recent ICE360 survey 2021, the article talks about the widened economic inequality.
Syllabus: GS-I Poverty and Developmental Issues; GS-III Inclusive Growth and Issues
ICE 360 Survey 2021
- Conducted by People’s Research on India’s Consumer Economy (PRICE), a Mumbai- based think-tank.
- The survey, between April and October 2021, covered 200,000 households in the first round and 42,000 households in the second round. It was spread over 120 towns and 800 villages across 100 districts.
- The quintile is a statical value, and the first quintile represents 20% of the total population, the lowest fifth of the data.
Key Findings:
- The income of the most deprived quintile (first) plunged 53 per cent since the pandemic hit the country between 2020 and 2021.
- In contrast, the income of the top 20 per cent wealthiest people surged 39 per cent in the same period.
- While the pandemic brought economic activity to a standstill for at least two quarters in 2020-21 and resulted in a 7.3% contraction in GDP in 2020-21, the survey shows that the pandemic hit the urban poor most and eroded their household income.
- Even among the poorest 20 per cent, those in urban areas got more impacted than their rural counterparts as the first wave of Covid and the lockdown led to stringent curbs on economic activity in urban areas.
- This resulted in job losses and loss of income for the casual labour, petty traders household workers.
- The survey shows that the richest 20% of households have, on average, added more income per household and more pooled income as a group in the past five years than in any five-year period earlier since liberalisation.
- Exactly the opposite has happened for the poorest 20% of households — on average, they have never actually seen a decrease in household income since 1995.
Way Ahead:
- Inspiring confidence through long-term policy stability and improving ease of doing business can address the concerns of two India.
- The upcoming Union Budget provides the government with an opportunity to intervene aggressively and address the inequality.
