Growth Should Take The Poor Into Account

Context: The financial growth during the pandemic has exacerbated poverty and inequality around the world.

Widening of inequality amid pandemic:

• Increase wealth of the rich:
  • The total wealth of the super-rich has increased in the same period to somewhere between $ 5 trillion to $ 13 trillion.
  • In America, the Institute for Policy Study says the combined wealth of its billionaires increased by 44.6% during the pandemic.
  • In any case, the top 50 super-rich in America holds as much wealth as the bottom 165 million.
  • Oxfam’s ‘Inequality Virus Report’ - The combined wealth of India’s billionaires has risen by 35% during the pandemic.
    • The report states that the rise in wealth of just top 11 billionaires alone is enough to pay for MNREGA work for ten years.
    • In any case, the top 1% holds four times the wealth that the bottom 953 million has.
• Increased poverty:
  • Brookings estimated that an additional 144 million people globally, in 2020, slipped below the stringently kept poverty line.
  • The World Bank and IMF poverty estimate show that India has surpassed Nigeria when it comes to having the largest population of people living in extreme poverty, adding 85 million more poor.
  • The average farm income, according to the 2013 National Sample Survey Office (NSSO) report, for roughly 50% of the population depends largely on farming, stands at a paltry Rs 6,426 per month.

Way Forward:

• Changing the approach of public expenditure: It is a false belief that bolstering the profits of the rich would trickle down, and giving direct cash benefits to the poor is inefficient since they don’t know how to spend.
  • According to news reports, while the consumption of basic food needs went up by 37%, the poor had actually cut down on drug and alcohol by 39%.
  • It is thus conclusively established the significance of roti, kapda and makaan for the poor households everywhere in the world.
  • In other words, such petty cash transfers have the potential to uplift the poor from the clutches of poverty.
  • It needs to be realised that the cost to eradicate extreme poverty from the globe is $100 billion, a tiny fraction of the pandemic stimulus that was pumped in to revive the global economy and instead ended up rewarding the billionaires.