Centre for Development Economics
Department of Economics,

Delhi School of Economics


“Who was Impacted and How? Poverty and Inequality in Covid times in India”


Ms. Mrinalini Jha
(Post-Doctoral Fellow, Azim Premji University)
Mr. Rahul Lahoti
(Researcher, ETH Zürich) 

Thursday, 28 October  2021 at 3:30 PM IST


 The Covid-19 pandemic and the subsequent nationwide lockdown, followed by the other smaller lockdowns and containment measures have had a significant impact on the incomes of households. In this paper, we investigate the impact of Covid-19 pandemic and the subsequent containment measures on household and individual incomes, inequality and poverty in India. We use an event study model to estimate income losses during the lockdown months and the subsequent recovery in the post-lockdown period. We undertake extensive heterogeneity analysis to determine how this impact varies by different socio-economic groups e.g. income groupings, sector, caste, etc. We estimate the changes in interpersonal and group inequality and poverty during the Covid-19 period. This paper is among the first to study the impact of Covid-19 on income losses, inequality and poverty in a developing country using high-frequency CMIE-CPHS survey data. We find that the pandemic and the containment measures led to large income losses and its impact was unevenly spread with the poor, urban workers shouldering most of the losses. On an average, households lost around 22% of their cumulative income over eight months (March to October). The cumulative decline was higher in urban areas than rural areas (26 percent versus 21 percent). For an average household in urban areas this amounts to losing 2.1 months of income (about Rs. 64,000 for a family of four) while losing 1.7 months of income (about Rs. 34,000 for a family of four) in rural areas. Additionally, poorer households bore a disproportionate burden of the crisis in terms of losses in incomes, reduction in savings, increase in debt and food security. Furthermore, even after seven months since the lockdown (by October 2020), economic recovery was not complete, in terms of being back to the pre-Covid levels.

All are cordially invited.