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It is unbelievable, but true. The number of billionaires in India has increased during the ‘covid’ months. The revelation has virtually shocked almost everyone. People are trying to find out the ‘success mantra’ of these people who have been able to include their names in the billionaires list during the Covid-19 pandemic. Even many economists are finding it difficult to define the reasons behind such a development. Many have raised the question that at a time when the GDP of the country had contracted by nearly 25 per cent, how did these people increase their wealth? Netizens have even gone a step ahead to suggest that these people should be made in-charge of economic affairs of the country.
A close look at the developments will show that nothing unusual has happened. The lethal Covid-19 virus has not affected all sections of society equally. The virus has hit the lower, lower-middle class people most. It is the daily wage earners, the farmers, shopkeepers, unskilled labourers, who have been affected severely by this pandemic. The daily wage earners have lost their income; the shopkeepers have lost their customers; the farmers and unskilled labourers have been left with no work during the four-month-long lockdown period. But the upper strata of society has not been affected so badly. The government servants have enjoyed paid holiday during the lockdown period. The same can be said about the entire salaried class too. The corporate world has also benefited during the pandemic. The government has reduced the corporate tax in anticipation that the excess money will help in capital creation and revive the economy.
Unfortunately, that did not happen. Instead of investing money in new or old ventures, the corporates had gone to the stock market to earn more. The question may be asked at a time when the entire world was witnessing a downward trend in the market, how wise was it to invest in the stock market? The answer is simple. Even when the market was down, the information & Technology (IT) sector was experiencing a major boom as everything started going online. So, the demand for the shares of companies relating to IT is on the rise. It is also being said that the government will have to invest a lot in the infrastructure sector. Thus, the companies dealing with the infrastructure sector are doing fine.
When the capital available is limited to a few sectors only, it is not a sign of good economic health. This is exactly what is happening in India. People are only interested in profit making and neglecting the need to make the economy stronger. In pursuit of profit, many are investing in foreign companies too. Clearly, they are more concerned about their self-interest, than national interest. It can be argued that there is nothing wrong in building systems that promote nation building. The easiest way to do so is to hike the tax rate after a certain income limit so that the profit-mongers are forced to pay more to the country, rather than investing in foreign companies. Time has come to adopt such a method to revive the economy.