Tackling inequality

Govt must make the right interventions in the Budget

The Covid-19 pandemic has increased inequality at multiple levels in different countries, including India. The initial lockdown and intermittent restrictions on public mobility have affected incomes for a large number of households. The pandemic also disproportionately affected smaller firms in the unorganised sector, which tends to be more labour-intensive. In fact, the business seems to have moved to more capital-intensive large firms exacerbating overall inequality. Large firms also benefited from lower corporate taxes and lower interest rates, which boosted profits. Most central banks, including the Reserve Bank of India, lowered interest rates and flooded the system with liquidity to contain