Pandemic of poverty: India's financial crisis worsens

Mafazah Sharafuddin
May 31, 2021

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As the country suffers the threat of death and disease, financial struggle looms over it. There has been a huge loss for several of the economy. The government has issued aid, however, it is insufficient and neglects the unorganized sector entirely. 

The estimation of the government, standing at Rs 1,250 crore, and is not close to what is needed by the people. Additionally, it does not aid those who don’t come under government schemes, meaning a huge chunk of the unorganized and industrial sector. 

The financial crisis in India due to COVID is a many headed demon. So many different issues have arisen since the start of the pandemic, and the people of India are suffering under the financial burden. 

Sudden shifts

Since the beginning of the pandemic, the word ‘unprecedented’ has been used innumerable times. Problems arrive suddenly, with no warning. People are losing their jobs all at once after years of working in the same place. 

With the magnitude of the death toll, many a times the sole breadwinner of the house passes away. This leaves the family floundering, looking for jobs and trying to keep mouths fed.

People who are newly unemployed and unable to find jobs in the same industry are left confused. They have a skillset that employers are not looking for and eventually, they have to resort to unskilled labor which gives them lower wages. 

Warning signs 

The fact is that the people are suffering. The numbers back it up. There has been a 15 to 20% increase in poverty since the pandemic began. This means more than 23 crore people have slipped below the poverty line. 

Unemployment has increased, too. 1.5 people have been lost their jobs, and those who continue to be employed face lowered salaries. The per capita income of the country has lowered by 16.8% to what it was in January of 2020. 

Within 2020, there was an increase in people partially withdrawing funds from their Employee Provident Fund accounts. While it was 54 lakh people in 2019, 2020 saw 1.27 crore people doing the same. 

According to RBI, there had been an 81.5% increase in that loans against gold jewelry by Scheduled Commercial Banks in March in comparison with the same last year. 

MFIs, MSMEs suffer losses

MFIs (Micro finance Institutions) cater to the poorer sections of Indian society. The lockdowns have has adverse effects on the functioning of NBFCs and MFIs. With the poor already suffering through unemployment and steep hospital bills, this too has caused a bad hit.

Some sectors are faring worse than others. These industries thrive on travel, face to face interactions and consumerism. Retail, MSME, and hospitality are some of them.

The pandemic has resulted in the closure of 15-20% of the MSMEs in India. Large scale supply chains are taking away their customers as they are not able to operate as usual during the pandemic. If the situation continues, there could be a much larger percentage of MSMEs closed during the pandemic. 

Small businesses run into trouble

Small businesses like family run stores are facing trouble getting customers and keeping their shops open. The lockdown hours put a huge dent in the time they can sell to people. Shops that don’t count as ‘essentials’ often cannot open at all. 

Chain supermarkets and other shops are seeing more traffic as these small businesses get neglected. Without their livelihood, the threat of COVID increases as they would not be able to afford the hospital bills and medication.

Sellers over the internet find it difficult to post packages as delivery services do not function everywhere due to COVID. Small businesses are losing customers at a large scale. 

Social workers rise to the occasion

While the situation is dire, social worker and organizations have taken the initiative to help people. All over India, social workers and volunteers are assisting on everything from grocery packages to cremations. 

The workers help with transportation, reservation of beds, intricacies of the Ayushman card, ensuring the patients and the family members staying with them are fed, etc. With the ongoing crisis with the bodies piling up with no one to deal with them, social workers are also burying and cremating bodies. 

Not just this, but they are also helping people who are not infected, but have been affected by the pandemic. Distributing food, rations etc. to those in need is another task they perform. 

However, without proper government aid to the poorer sections of society, there is no saying how bad the situation could get.

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News Network
March 27,2025

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The Karnataka government has announced that Nandini milk will become ₹4 costlier per litre starting April 1, 2025. This is the second price hike this year.

The decision was made during a cabinet meeting led by Chief Minister Siddaramaiah. Karnataka Cooperation Minister K N Rajanna and Animal Husbandry Minister K Venkatesh said the increase is meant to support dairy farmers by covering the rising costs of producing and processing milk.

Officials also said that:

>> The extra money from the price hike will go directly to the milk producers.

>> The earlier ₹2 price hike (announced on June 26, 2024) will be withdrawn.

>> The new price hike of ₹4 will apply to both 500 ml and 1-litre packets.

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News Network
April 4,2025

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Israel has announced the launch of a new ground onslaught in Gaza City, with rescuers saying military aggression has killed at least 30 people across the Palestinian territory since dawn.

In Gaza City, the Israeli military said ground troops had begun pushing into the Shejaiya neighborhood to expand the so-called "security zone" there, claiming that civilians had been allowed to evacuate the area. 

Initial reports, however, said a Palestinian woman and her daughter were just killed in an Israeli artillery shelling on displaced people in Shejaiya.

Gaza's civil defense agency said Israeli military aggression had killed at least 30 people in the Palestinian territory since dawn, adding that the toll was "not final".

A single Israeli strike on Khan Yunis killed at least 25 people, a medical source at the southern city's Nasser Hospital said. 

"The situation is very dangerous, and there is death coming at us from every direction," Elena Halas told AFP reportedly via text message, adding that she and her family were trapped in her sister's house in Shejaiya.

Israel has pushed since the collapse of a short-lived truce in the war to seize territory in Gaza. Simultaneously, it has escalated attacks on Lebanon and Syria, with a strike in the south Lebanese city of Sidon killing a Hamas commander along with his son on Friday. 

Minister of military affairs Israel Katz had said on Wednesday that Israel would bolster its military presence inside the Gaza Strip to "seize large areas that will be incorporated into Israeli security zones", without specifying how much territory.

Prime minister Benjamin Netanyahu said the military was dividing Gaza and "seizing territory" to force Hamas to free the remaining captives seized in the October 2023 operation inside southern settlements. 

Netanyahu has said his regime is working closely with the US to implement President Donald Trump's plan to displace Gazans.

Latest air raids have targeted Gaza City, as well as Beit Lahia, Rafah, and Khan Yunis, killing dozens of people and injuring several others.

On Thursday, hundreds of thousands of fleeing Gazans sought shelter in one of the biggest mass displacements of the war, as Israeli forces advanced into the ruins of the city of Rafah. 

A day after declaring their intention to capture large swathes of the crowded territory, Israeli forces pushed into the city on Gaza's southern edge which had served as a last refuge for people fleeing other areas for much of the war.

The Ministry of Health in Gaza said on Thursday that 112 Palestinians were killed by Israeli airstrikes, with at least 70 of those deaths taking place in Gaza City, in the north of the strip. 

Gaza's civil defense agency said women and children were among the dead, while six people were still unaccounted for in the strike on Dar al-Arqam School in the al-Tuffah neighborhood, northeast of Gaza City, including a pregnant woman who was expecting twins. 

Beit Hanoun Mayor Mohammad Nazek Al-Kafarna was one of the victims of the Israeli strike that hit the school on Thursday.

The Health Ministry said on Thursday that 1,163 people have been killed in the Palestinian territory since Israel resumed intense bombing on March 18, bringing the overall death toll since the war began to 50,523.

The usurping entity accepted longstanding negotiation terms by the Hamas resistance group under a Gaza ceasefire, which began on January 19.

On March 18, however, Israel unilaterally broke the truce and resumed its relentless bombing of Gaza.

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News Network
March 21,2025

Bengaluru: The Karnataka Assembly on Friday passed Bills doubling the salaries of the chief minister, ministers, and legislators, adding an annual burden of ₹62 crore on the exchequer.

The CM's monthly salary will increase from ₹75,000 to ₹1.5 lakh, while ministers will see a 108% hike, from ₹60,000 to ₹1.25 lakh. MLAs and MLCs will get ₹80,000 per month, up from ₹40,000, and their pension will rise from ₹50,000 to ₹75,000.

The Karnataka Ministers Salaries and Allowances (Amendment) Bill and the Karnataka Legislature Salaries, Pensions and Allowances (Amendment) Bill were passed without debate, as the Opposition BJP protested in the well of the House.

The Bills cited the rising cost of living as justification for the hike. The Assembly Speaker and Legislative Council chairperson will now receive ₹1.25 lakh per month, up from ₹75,000.

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