A graph showing macroeconomic condition of India would give an appearance of deep trench. This trench is not because of usual trade cycle but an unusual occurrence of pandemic crisis that has caused the whole world to stop functioning at one go. The effects of this pandemic differs in different countries but has affected every other country in the world whether it is developed, developing or under-developed. Talking about a developing country, India, it is not about how much the country’s growth has decelerated but how badly it has impacted different income group of people. This can be said because of existing inequality.
In the Economic Survey 2020-21, it is said that given India’s stage of development, India must continue to focus on economic growth to lift the poor out of poverty by expanding the overall pie. At the same time it also states that it does not imply redistributive objectives are unimportant but that redistribution is only feasible in a developing economy if the size of the economic pie grows. But here the more important question is whether there is any trickle down effect taking place while economy is growing? If the growth is inclined towards already richer section of the population and no triple down is observed it will further increase the burden of the poor and the government for formulating more redistributive policies and implementing it. The solution to this lies in the basic structure of the country on which the whole economy depends. Basic structure is nothing but how its own people have moulded the country. If we take examples like caste, gender discrimination, we can find this inequity hampered right of equality of opportunity as a citizen of the country. Even in the case of poor many opportunities get faded away and he or she might end up working where they did not desire for and hence their productivity decreases which restrict income growth. Focusing on reducing the existence of these loopholes is more important than having it on one side and minimising its effect on another side. For example, reservation policy, which allows the caste system to prevail. Labour and industrial policies that restrict the growth of one another.
When we have so many obstacles in the structure it takes time to make the economy equally opportunistic for everyone. Now, there is a need for some long term measures that will not just revive the economy from the pandemic but it will bounce it even bigger.
