(wl 7177)-Poverty and Inequality in India: Before and After COVID-19

This paper offers four findings. First, rural poverty saw a modest decline despite the onset of COVID-19 in 2019-20 and fell as sharply in 2020-21 as it had in 2018-19. Rural poverty rose modestly only during the April-June 2020. Bumper crops in 2019-20 and 2020-21, expansion of MGNREGA, and free distribution of an additional 5 kilograms (kg) of food grain per person per month explain this trend in poverty. Second, urban poverty rose modestly in 2020-21, with the declining trend restored by the April-June 2021 quarter. The free distribution of an additional 5 kg of food grain may be credited with arresting a sharper rise. Third, these trends hold for different social and religious groups, including scheduled castes and scheduled tribes and Hindus and Muslims. Finally, as measured by the Gini coefficient, income distribution saw a sharp decline in the rural, urban, and rural and urban areas combined. This outcome likely resulted from the lower-income classes doing relatively better in rural areas and the consumption of contact-intensive items such as tourism, transport, and lavish restaurant meals by the upper-income classes taking a bigger hit in urban areas.