Is India Ready for a New Social Compact to Deal with the Crisis

Context: Lockdown induced economic crisis has aggravated the societal divide between rich and poor by pushing poor people into destitution and deprivation.

Lockdown Induced Social Divide 

• Urban India’s middle- and upper-income classes supported the lockdown. 
• In absence of adequate insurance against health calamities and consequent loss of earnings, poor people are the worst sufferers.

New social compact: Redistribution of Wealth to Prevent Societal Divide

• Impose wealthy tax: Temporary increase in the top marginal tax rate to 40%, or a re-introduction of the wealth tax for those with a net worth of ?5 crore or more.
• Solidarity by Businesses and wealthy individuals: by pledging a part of their wealth to poor ones as a social compact.

Conclusion:

• Tax contribution by wealthy individuals as a means of redistribution could not only help in restoring the economy but will also boosts the value of wealth and financial assets of wealthy individual.