Saswata Guha Thakurata
Debolina Biswas
Covid-19 has virtually stalled our lives. In India, the combined outcome of the pandemic and the nationwide lockdown has been colossal. More than the disease itself, it is actually inequality that has resulted in the unfathomable amplification of the already existing precarious conditions of the vulnerable mass. Instead of being the ‘great leveler’ Covid-19 will lead India’s precipitous inequality to skyrocket in a very short span of time. The Indian government has recently turned down the policy recommendation to tax the super-rich. Further an amount of Rs. 68,607 crore loans of 50 willful defaulters has been ‘technically’ or ‘prudentially’ written-off by the banks. It is both sordid and infuriating that despite the egregious crisis faced by millions, ensuring the inexorability of rapacious accumulation by the capitalists appears to top the Government’s priority list.
Who is suffering the most and why?
Notions likes “we all are suffering” conceal way more than it reveals. Firstly, the heterogeneity of ‘we’ can be perceived along various socio-economic axes, in terms of which inequality has only become more pronounced in the free-market era. The recent Periodic Labour Force Survey (PLFS) data show that almost 88-89 percent of the total workforce in India is associated with the informal sector. Of the remaining 12 – 11 percent in the formal sector, there are contractual employment and part-time employment which also belong to the category of informal work (Kannan 2020). The earning scenario in India is extremely grim. For example, in 2015, 82 percent males and 92 percent females earned less than Rs. 10,000 in a month (State of Working India Report 2018). Inequality between various social groups is no less striking. Caste-wise consumption (expenditure) as well as wealth inequality has risen in the post-reform period (Anand and Thampi 2016; Kumar et al. 2019). The current discussion, however, focuses only on the class dynamics underlying India’s growth process in relation to the ongoing economic fallout of the pandemic and the lockdown that followed.
Secondly, at present not all of us are suffering similarly (Bhattacharya and Bansal 2020; Mandela and Yuvaraj 2020).[i] In a “lockdown”, apart from certain essential ones, most economic activities cease to continue. For those of us formally employed in organized sectors, we may have the option to ‘work from home’. Since the respective production processes continue, and even if the production is discontinued temporarily in some cases, the flow of income for them is somewhat sustained while it is a zero-earning situation for most of the rest.
Two words are central to our understanding of the inequality of suffering – “home” and “income”. “Stay home. Stay safe” is a gross irony for those crores of Indians who do not own a proper home. The recent (76th round) National Sample Survey Organization data on Housing and Sanitation shows that 59.6 percent of the population does not even have a room. About 66 percent of the rural population has less than a room whereas it is around 49 percent of the population in the case of urban India. Only 24 percent of the total population has more than one room (Khan and Abraham 2020). Generally, slum dwellers even have to share a common toilet. The idea of home is violently different for a woman facing domestic violence.[ii] At a time when, the idea of ‘work from home’ is gaining popularity, we find that millions of Indians work too far away to return home safely and easily during this crisis as made evident by the glaring visuals of the weary migrants in various parts of the country. Lakhs of dismayed migrant workers are struggling to return home. They had two choices – a starvation and exposure to Covid-19 – both having a similar plausible outcome – death. The migrants chose to return home even if it meant walking hundreds of kilometres. Unfortunately, this strenuous journey is also turning out to be deadly for many. The Government’s latest attempt to arrange trains for their conveyance has in many cases added to their predicament. However, their great leap ‘backward’ does not guarantee them freedom from a ravenous life thereafter. So, let us turn to the issue of income.
Both consumption and savings are primarily linked with income. Even at a near zero or zero income, people still need to spend for their subsistence which is funded by either past savings or by borrowing. Most of India’s labour force already has an abysmally low level of income. Kannan (2020) discusses that 60 percent of the workers do not even earn the minimum wage. Hence it is quite unlikely that they will have much savings. This pandemic is preceded by a severe economic downturn and an unprecedented high unemployment rate. During the lockdown income, most informal workers have had zero income. They neither have past savings nor any source to borrow from at this moment. Many of them are heavily indebted already. The recent estimate by ILO predicts that around 400 million people in India will lose their jobs due to this pandemic, implying a bleak possibility of future earnings. In short, right now most Indians do not have jobs and past savings while their future earning is uncertain. This precarious situation is preceded at first by a ‘jobless growth’ and then by a ‘job-loss growth’ phase.
The other, albeit small, segment of Indians can fortunately afford to maintain ‘social distancing’, has an income stream (even if it is lower than earlier), has accumulated savings and wealth and has access to credit if required. Those with enough money at their disposal tend to pile up stocks by creating a panic buy situation. This, coupled with the interrupted supply chain, is likely to dry up the stocks fast and also increases prices. Those who will be primarily affected by such a situation are the poor, specifically the informal workers in both urban and rural areas comprising of the self-employed people, contractual/casual laborers, farmers, landless laborers, short-term or circular migrants, etc. The increased provision of food items through the public distribution system is a welcome step but it would certainly not suffice. Given these circumstances, direct cash transfer is the need of the hour.
The way fortune was made determined this misfortune
It is imperative to inquire whether all these indicate a mere distortion from an equilibrium simply because of an external shock or if there is anything systemic to it. We wish to argue that this entire post-pandemic catastrophe is not awry because the empire was actually built on iniquitous processes. While the en masse suffering of underprivileged Indians is certainly linked to the suddenly announced complete lockdown, ceteris paribus the resultant immiserization is fundamentally determined by the very logic of the neo-liberal accumulation regime in India. The pre-Covid-19 economic crisis has aggravated it further.
The iniquitous nature of India’s growth is ubiquitous and the disparity has only accentuated over the years (Basole 2014; Vakulabharanam 2010). Rural retrogression, jobless growth, swelling informal workforce and burgeoning disparity are some of the most visible ramifications of the neo-liberal regime in India. On the other hand, the dis-equalizing process has, in turn, been feeding into the growth upsurge. Coupled with the deepening agrarian crisis, the urban-centric growth only implies an increasing urban-rural divergence. Without much scope for rural non-farm remunerative activities, distress migration (mostly of circular/seasonal kind) to urban centres is an obvious consequence. The urban-centric boom has increased the economic hold of the class of urban elites, a significant contributor to the growing consumption spree in neo-liberal India (Patnaik 2009; Vakulabharanam 2010; Vakulabharabam and Motiram 2012). The informal labour force is employed in activities fundamental to the urban way of living. The informal economy steadily subsidizes its formal counterpart. Additionally, policies like demonetization and the hasty implementation of the Goods & Services Tax (GST) practically bulldozed the cash-dependent informal economy. With falling overall growth, sluggish investment and industrial growth Indian economy moved from a situation of “jobless growth” to that of a “job-loss growth” (Kannan and Raveendran 2019).
It is in this context the Covid-19 episode began. Meanwhile the condition of the public health sector had only been deteriorating. Public health expenditure in India is only 1.02 percent of the GDP, which is much lower than many poorer countries in the world. According to the data from the National Health Profile, India has a provision of only 7 hospital beds for every 10,000 persons as of today. It is an empire built on inequality which has suddenly been hit by something that does not discriminate and was then accompanied by a poorly managed nationwide lockdown. Therefore, it is bound to cause more damage to those who have hardly reaped any benefit from the growing size of the pie. This might only worsen. The recently announced “Atmanirbhar Bharat” (self-reliant India) package is bereft of any effective measure (except for the increased allocation towards rural employment guarantee scheme for 100 days) to deal with the ever intensifying deficiency of effective demand as most of it only promises loans to various sectors because of government’s predilection for supply side policies. To make it worse, some states ruled by the Bharatiya Janata Party have already announced the dilution of labour laws certainly purveying a sense of schadenfreude to the bourgeoisie.
Conclusion:
We are currently at a poignant socio-economic juncture. Everyone is aghast at the abysmal condition of millions of poor Indians. Their lives have been virtually ruined by the Covid-19 abyss and the nationwide lockdown, the consequences of which are being multiplied by the inept intervention of the government. The above discussion delineates that this is inextricably embodied in the neoliberal regime of accumulation in India. The ravishing citadel of affluence in free-market India reinforced socio-economic divergence as much as it thrived on burgeoning inequality in turn. Above all, the recent political transformation in the country has caused irreversible ruptures in India’s social fabric. This too has serious consequences for the ongoing crisis, an analysis of which is beyond the scope of the current discussion. We, as a nation, must stop experimenting with the resilience of the vulnerable sections of our society. Not only is it unjust but it should also be remembered if the poor are dead in the short-run, the rest of us will soon follow suit (Kannan 2020). The sheer ruthlessness of the way in which we organize production and distribution is continued on the basis of a presumption – they are too many to be scarce. This attitude is fundamentally based on a violation. There is no recognition of the poor and vulnerable segments of the population as individuals/citizens with rights. Rather, they are treated as ‘resources’ at the disposal of the State as well as the bourgeoisie. We, the privileged ones, have just started to experience some glimpses of the dystopia outside novels and celluloid, something the poor have been experiencing all along.
We do not yet know whether we are already in the endgame. The fundamental uncertainty that embodies the future deprives us of that knowledge, despite millions of “error correction” models. Who knows, maybe, albeit quite ironically, Francis Fukuyama was indeed right. Capitalism could very well be the “end of history”. It is perfectly capable of ensuring an apocalypse, leaving no chance to envision a new chapter in history under the title of “Post-Capitalist World”. What will happen? To use the cliché, “only time will tell”, if we survive in the long run.
Saswata Guha Thakurata (saswata.economics@gmail.com) is an Assistant Professor of Economics at Kanchrapara College, University of Kalyani, India.
Debolina Biswas (debolina.biswas13@gmail.com) is an Assistant Professor of Economics at Gurudas College, University of Calcutta, India.
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[i]Various village level studies show that agricultural labour, migrant workers, migrant cultivators, migrant agricultural labours, handloom workers, power loom workers, cultivators are in a dire situation due to the nationwide lockdown. Most of them do not have enough resources to sustain their life. Also, government aids are not reaching them on time. The pandemic has pushed them towards an uncertain future. On the contrary, owners of businesses and capitalist farmers are facing labour shortages because of the lockdown and they fear that the wage of the agricultural workers/workers might increase, which will eventually increase their cost of cultivation/operation.
[ii]According to the National Commission for Women, the number of cases of domestic violence has doubled during the nation-wide lockdown. See: https://www.epw.in/engage/article/covid-19-domestic-abuse-and-violence-where-do
