Editorial: Widening gulf

Rising income inequality is the key reason why poor are finding it hard to access proper healthcare in this crisis

The coronavirus pandemic has further accentuated the economic inequalities in the country, posing a major challenge for the policymakers to formulate appropriate strategies as the country begins the recovery path. The gulf between the rich and poor has been widening. While the deadly virus has spared none, its impact on the poorer population has been way more devastating. A Pew Research report of 2021 suggested that India’s poor population had doubled from 6 crore to 13.4 crore after the first wave of the pandemic. While the economic impact of the second wave remains to be assessed fully, rising income inequality is the key reason why poor Indians are finding it hard to access proper healthcare during the ongoing crisis. As former Governor of Reserve Bank of India D Subbarao cautioned, the current trend of “extreme unevenness” in economic recovery and “sharpening inequalities” between upper income segments and lower income households could hit the growth prospects in the near future. A study by the Azim Premji University found that the Covid-19 pandemic has pushed 230 million people into poverty with a 15% increase in the poverty rate in rural India and a 20% surge in urban areas. While most salaried class individuals have access to some form of health insurance, those working in the informal sector have no such benefits. For poorer families who do not have the financial resources to approach private hospitals for treatment, the only hope is to get treated at government-run hospitals, which have been totally overburdened. A key reason behind inadequate facilities at the government hospitals is that India’s spending on public healthcare remains one of the lowest in the world.

The situation in rural India is particularly grim. Given the creaky medical infrastructure in the villages, the rural households are anxious about the impact of a possible third wave. The earlier expectations of a sharp economic recovery this year have been dashed by the new pandemic wave. The RBI too has reduced its growth forecast for the current fiscal by one percentage point, from 10.5% to 9.5%. The World Bank has projected India’s economy to grow at 8.3% in 2021. For the first time in four decades, the economy contracted last year by as much as 7.3%. This is in sharp contrast to the performance of China which never fell below its pre-pandemic level while the United States is expected to recover to its pre-pandemic level this year. Given the growing economic distress, it is necessary for the Centre to provide necessary safety nets to the poor. Direct cash transfer to the needy sections is an option worth considering. The fight against inequality should be at the heart of economic rescue and recovery efforts.

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