Shrinking incomes, depleting savings: millions plunged into poverty in India due to Covid

According to a study by the Pew Research Centre, an estimated 75 million people have slipped into poverty in India since the pandemic began last year.

A study by Azim Premji University paints a much more grim picture- 230 million fell below the national daily minimum wage of 375 rupees since the covid outbreak in 2020. 

According to data from Centre for Monitoring Indian Economy, the rate of joblessness rose to nearly 8% in April 2021 from 6.5% in March with an exodus of more than 7 million people from the workforce. The informal sector, which employs approximately 411 million workers, has suffered the brunt of the restrictions and curbs.

The pandemic-induced lockdowns have shrunk the incomes and exhausted the savings. The depleting household savings and falling incomes will affect domestic consumption, which accounts for almost 60% of the GDP, economists have warned. 

According to the government statistics, the GDP shrank 8% in the last year, the biggest contraction since 1952. Economists have slashed their forecasts for the current fiscal year. Although India could still emerge as one of the fastest growing economies, according to the NGO Oxfam, it will also be one of the most unequal country.