The COVID-19 pandemic inflicted dual shock on India – a public health crisis compounded by economic devastation, thereby reversing a decade of hard-won poverty-reduction gains.
COVID-19 Pandemic Accelerating Class Inequalities in India
K-Shaped Recovery – While 84% of households suffered income decline in 2020-21, India’s billionaires grew from 102 to 142, with collective wealth of the top 100 hitting INR 57.3 lakh crore.
Billionaire vs. Working-Class – Between 2020 to 2022, Indian billionaires saw wealth increase by 121%, while the bottom 50% saw their income share fall to just 13% of national income.
Informal Sector impact- CMIE data shows 122 million people lost jobs in April 2020 alone; three-quarters were small traders and wage labourers in the informal sector.
Digital Divide – Fewer than 15% of rural Indian households have internet access (42% urban), making technology-driven remote work and education inaccessible during lockdowns. (UNICEF)
Gender-Class Compounding – 37.1% of women lost jobs in April 2020 versus 27.7% of men; by April 2021, women accounted for 73% of job losses, with recovery far slower for urban women.
The top 1% own nearly 40.6% of India’s total wealth; in contrast, the bottom 50% (700 million people) own around 3% of total wealth. (Oxfam)
Capital vs. Labour – Corporate Tax cut from 30% to 22% (2019) combined with pandemic-era surge in equity markets rewarded capital owners, while wages of casual workers stagnated or collapsed.
Access to Quality Healthcare – high out-of-pocket expenditure in private hospitals
Education Inequality – School dropout rates nearly doubled in 2021-22. Rates for SC (22.5%), ST (26.9%) and OBC (20%) children at the secondary level far exceeded the general category (15.6%).
Unpaid Care Burden (Hidden Class-Gender Tax)- During the pandemic, women’s unpaid care work grew by nearly 30%; on average (UN Women.)
COVID-19 Pandemic Accelerating Poverty in India
Extreme Poverty – More than 4.6 crore Indians fell into extreme poverty in 2020 – nearly half of the global new poor that year, according to the United Nations.
Mass Job Losses – CMIE data shows the highest single-month job loss of 123.8 million persons in April 2020, affecting over 30% of the total workforce
Migrant Worker Crisis – Over one crore migrant workers returned home during the lockdown without any livelihood or social security.
Informal Economy Collapse – ILO estimated approximately 400 million workers in India’s informal economy were at risk of falling deeper into poverty during the pandemic
Food Insecurity due to loss of livelihood. World Food Programme estimated 130 million additional food-insecure persons globally.
Wage Collapse – A CEP survey of urban workers (May-July 2020) found earnings fell 48% on average compared to pre-COVID months of January-February 2020.
Rural poverty – SC/ST communities, casual labourers and self-employed were the most impacted
Risk of child labour increased in India as job losses in the informal sector, inadequate social protection, and financial pressure led employers to use children as cheap labour, compounded by school dropouts and orphanhood from COVID deaths.
Reverse Migration of labourers created excess pressure on the rural economy and agriculture, creating a poverty trap as overcrowded agriculture could not absorb them with dignified livelihood
The pandemic revealed India’s structural inequalities, highlighting the urgent need for inclusive welfare, universal healthcare, social security, and resilient livelihoods.