Modi government policies are making workers, small traders and farmers destitute

These factors together with falling rural wages and the destitution of many small traders and farmers have a feedback effect on rural demand for consumer goods purchased from urban industry.

There are reports of a sluggish demand for two-wheeled vehicles, otherwise purchased in large numbers by the rural population. This stands in stark contrast to the boom in stock markets and urban start-ups, creating many new dollar millionaires and billionaires, with two Indians currently vying to be the richest people in Asia.

The social security policy observed during the recession forced the rural economy to accept the burden of supporting laid-off urban workers. Linked to urban migrants by family ties, rural households of women and elderly people who have remained in the country are obliged to assume and will of course assume this burden.

As this study shows, the result has been the destitution and indebtedness of rural workers: wage earners, small farmers and small traders.

Instead of addressing the problems of agricultural stability and growth, which have been aggravated by the recession, the Indian government has sought to pass legislation to increase the role of agricultural trading conglomerates in the marketing of agricultural products, strengthening thus the role of commercial monopsonies in agriculture. .

The determined opposition of the peasant movement in some states and the importance of the rural vote in elections seem to have put an end to these attempts at monopolization since the laws in question have been repealed and the government has pledged to maintain prices minimal support for some crops.

Unless policy measures are taken to increase social security and improve the capabilities of workers and small farmers, urban-rural inequalities, rural gender inequalities and social inequalities are all at risk. to increase in the Indian economy.

These are the factors that would lead to a K-shaped recovery: while shareholders and start-ups are in a V-shaped recovery, informal workers and small farmers remain at the bottom and experience, at best, a slow recovery.

This K-shaped recovery is reflected in the Indian gold market. The authors of the working papers said: “Our study and others show that there has been considerable selling or mortgaging of gold. Meanwhile, India imported gold at a record US$55.7 billion in 2021, more than double the tonnage of the previous year. Reports attributed this increase in gold imports to a backlog of marriages, which had been reduced by the closures. This pent-up demand for gold came from the upper and upper middle classes, who had not suffered extreme income losses. The K-shaped recovery is precipitated by the central government’s insistence on a policy of not using available fiscal space for income transfers to the poor.

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