A Tale of Two Indias https://www.theindiaforum.in/article/tale-two-indias Jan 2023
Pandemic in India has seen a majority of its citizens going hungry to bed while another, smaller, section making millions. An inclusive, sustainable, and equitable recovery must deal with the triple crisis of the economy, health and climate.
unlike countries that have robust social security systems or have pursued aggressive fiscal measures, a temporary supply ‘shock’ in India can lead to a longish depressed effect on jobs, incomes, and demand. Countries with such systems or policy responses would have, in effect, guarded against an aggregate demand and supply mismatch once the lockdowns were lifted.
A pandemic-induced lockdown disrupted the supply side of the economy. But once the supply gets stabilised, the overall demand needs to match up to it...
A purely fiscal measure may address just one — economic — of the three crises. Instead, a green fiscal response, which focusses on spending on greening the infra sector while changing the energy mix of the economy as well as spending on the care economy, may take the triple crises head-on.
Such a response needs to forefront climate justice by incorporating redistributive elements, some of which are intrinsic to this path and some need to be designed as part of the programme. Our work shows that this green path is not only more labour-intensive compared to the business-as-usual scenario, it also favours the rural, unskilled and marginalised sections of the population. Additionally, some specifically built-in components — financing the programme through wealth and inheritance taxes; a right to access to energy to all — could help address the growing wedge between the two Indias.