India is once again moving towards becoming a collective poor country


The latest figures released by the National Statistics Office for the financial year 2020-21 show that the Indian economy is in a slump. Between 2019-20 and 2020-21, India’s GDP lost Rs 10.56 lakh crore. This is a negative increase of -7.3 per cent. The demand-supply imbalance has led to a slowdown in the economy.

In 2020-21, the per capita annual income of the people was Rs 55,783, while in 2019-20 it was Rs 62,056. Consumables are used to measure poverty levels rather than income. Using the cost, it can be estimated that the country’s per capita income in the first year of the Corona epidemic was Rs 4,649.

These figures show that in the first year of the Corona epidemic, all economic activity has slowed as expected. But the paradox is that even when a large number of people do not have the means to earn an income or their jobs become erratic, there are costs. Because at such times most people use their savings to run the house. Either people don’t have money right now or they’re slowly going back to jobs, because jobs haven’t grown as much as they should in the last quarter, according to GDP figures.

When the new financial year began in April, the second wave of the corona was raging in India. The wave also spread rapidly in rural areas. As a result, lockdowns were imposed in many areas. As a result, the epidemic has become a major disaster for about 500 million people in rural areas.

Between May 1 and 24, about 78 lakh new corona cases were reported in India. This is the highest number ever. By this time every new case of corona in the world had come from India. As a result, every third death in the world happened in India. Every second new case reported in India was from a rural area, while every other death was reported from a rural area. That is, every third incident in the world has happened in rural India.

The first wave of the Corona did not have much effect on the countryside. It was then widely believed that it was an urban disease. We have seen how the infrastructure of healthcare in cities and metros has deteriorated due to excessive stress. The statistics of what happened in the second wave in the rural areas are shocking.

There are indications that the situation is worse this year than last. The second wave, which has also reached rural areas, has come as a huge shock to the already poor masses. Experts estimate that more than 50 million rural people in the country will fall into a vicious cycle.

Most of the contract workers in rural areas have been living a life of irregular unemployment for the past year due to the demolition of the corona. Not only this, with the increase in the number of victims, the cost of healthcare can also increase significantly. So a large part of people’s income or savings is being spent on health. At present, all states have a ban on going out and work.

While it is true that the severity of lockdown is not the same as last year, the level of lockdown this year varies from state to state and from district to district in the same state. So those who do not have a means of regular income are living in severe financial uncertainty.

Statistics from the Center for Monitoring Indian Economy (CMIE) show that the national unemployment rate is close to the level of June last year. Unemployment was at an all-time low due to nationwide lockdowns and restrictions. In the second week of May, the unemployment rate was 14.71 per cent in urban areas and 14.34 per cent in rural areas.

This level of unemployment is called the ‘declining unemployment rate’. The unemployment rate in 2017-18 was the highest in the last 45 years. The Corona epidemic has exacerbated the situation. Due to poverty and low income earners, the health effects of corona in rural areas are becoming extremely detrimental.

On the other hand, rural areas account for 46 per cent of the country’s total income. The rural economy remained stable last year. This was made possible by the substantial growth in the agricultural sector and government spending on rural schemes. But this year, it has also come to a standstill. So far this year, employment in the agricultural sector has grown by only three per cent. Because millions of people returned to their villages, but they could not find employment. Apart from this, due to unfavorable agricultural practices, even though there is a lot of production, the income is increasing or decreasing.

India has been hit hard by the Corona epidemic, which has seen the lowest economic growth in a decade. The lockdown has had a very adverse effect on rural areas. Poverty has increased in rural areas.

Unemployment is soaring and inflation is soaring. As a result, people’s expenditure on essential commodities is declining and development work is stalled. In the year 2021, the workers working in the unorganized sector are mainly poor in rural areas. They have not been getting regular employment since last year. His stories of surviving such a difficult situation are being discussed in the media. People have stopped eating pulses due to increase in ration prices. People’s demand is not being met through schemes like MGNREGA which provide employment. Many people are living on a meager income. The government has taken several measures to end this bad phase of the economy. But the question is, is it having any positive effect?

According to the World Bank, the Pew Research Center estimates that the post-Corona recession has reduced the number of people earning देशात 2 a day or less in the country from 6 million to 134,000. It is clear from this that (after 45 years) India is once again moving towards becoming a ‘collective poor country’.

The country’s uninterrupted journey towards poverty eradication since 1970 has also been interrupted. In the 25 years since independence, there has been an increase in poverty. Between 1951 and 1954, the poor population increased from 47% of the total population to 56%.

In recent years, India has emerged as a country with a high rate of poverty reduction. According to the 2019 Global Multidimensional Indicator, between 2006 and 2016, about 27 crore people in India were lifted below the poverty line. In 2020, India was named the world’s poorest country.

There has been no census of the poor in the country since 2011. However, according to UN estimates, there were about 364 million poor people in the country in 2019, which is 28 per cent of the total population, and the Corona has increased the number of these poor.

On the other hand, millions of people living in urban areas have also fallen below the poverty line. According to the Pew Research Center, the middle class ranks third. Billions of people in the country have either become poor or are on the verge of becoming poor.

Is this a temporary situation? The general belief is that economic progress puts many people above the poverty line. But the question is, how will this happen? People have cut costs or they have nothing left to spend. They have lost all their savings. Therefore, their purchasing power will be less in future also.

The government is only giving relief to the people in these terrible times. This means that the current financial situation will continue for some time to come.

Vikas Parasram Meshram works in the development sector
[email protected]


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