Inflation, Unemployment and Inequality

  • IASbaba
  • May 22, 2021
  • 0
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  • GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 

Inflation, Unemployment and Inequality


  • The labour force participation rate in India has fallen for three consecutive months, and was barely 40% in April. 
  • the unemployment rate has gone up to 8% as per CMIE
  • Poverty ratio went up by 15% in rural areas and 20% in urban areas during March to October 2020 as per survey conducted by Azim Premji University.
  • On the other hand, the stock market is bestowing increasing wealth and capital gains on rich thus increasing inequality.
  • Wholesale price index (WPI)-based inflation for April is now above 10%. Of this, the fuel sub-component was at 20%.
  • The informal sector, consisting of small and medium enterprises, is still struggling.


  • The best way to tackle this double challenge of inflation and loss of incomes is through direct fiscal support to hard-hit households.
  • Cash injections of ₹5,000 per month to all those covered by the public distribution system (PDS) would be advisable for at least three months.
  • An extension of higher grain provisions for food security, as carried out last year, is also necessary.
  • The immediate priority is to attend to our health crisis, for which we need universal and free vaccination as quickly as possible.

Connecting the dots:

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