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  • Writer's pictureThe Financial Literacy Cell

Reverse Robinhood Effect

Have you seen Titanic? Specially its climax. The current situation of world economy is pretty similar.

It’s a myth that everyone is on the same level, having equal access to even the basic amenities of life. In reality, if some are enjoying their lives in Limousines then there are others, left to die, of hunger, on the roadsides.

There is folklore of a vagabond, Robin Hood, who used to loot the houses of rich and then distribute his gains amongst the poor. Robin Hood effect is when the less well-of gain economically at the expense of the better-off. The phenomenon derives its name from an Anglo-Saxonic folkloric outlaw Robin Hood.

But, sadly, though the COVID-19 virus proved to be a robin hood for Mother Earth yet its effect on inequality has been so negative and detrimental to society at large that the pandemic has also been termed as 'Pandemic of Inequality'.

The crisis brought to our notice, the deeply unequal world economy that we all are a part of. It has exposed our collective inability to work for all. When over two million people have died, and millions getting forced into poverty the world's wealthiest individuals and corporations have been thriving.

During the lockdown, the increase in the wealth of Indian Billionaires was 35% which approximately equals ₹3 trillion. The aggregate wealth of top 100 Indian Billionaires is enough to give each of the 138 million poorest Indian a cheque of ₹94,045. MGNREGAS of the Health Ministry too can be financed for the next 10 years with the wealth of Top 11 billionaires. While the richest man in Asia, Mukesh Ambani, was earning ₹90 crores in an hour, the lowest 24% of Indian population was earning ₹3000 a month. His wealth alone is sufficient to provide for 40 crore informal workers below poverty line.

With these unbalanced effects of Lockdown on different strata of society, the recovery too is expected to be asymmetrical. Though the fortunes of Billionaires returned to their pre-pandemic highs in just nine months, the same can take over a decade for world’s poorest.


Till October, by the closure of schools 32 crores students were hit, of whom 84% resided in rural areas and 70 %attended government schools. 40% teachers in government schools feared that due to continued closure one third of the students might even not return when the schools reopen. The section likelier to see higher dropout rates was of Dalit’s, Adivasi’s and Muslims.

With schools closed, it is estimated that we can regress back to the levels not seen since 1980's in the dropout rates. It will be the largest reversal ever, taking us back 30 years before the Sustainable Development Goals (SDGs) or even the Millennium Development Goals, and hindering the progress of last three decades.

Gender gap

Girls are often the first to be withdrawn from school (or to miss classes) at times of financial stress. With educational institutions closed, they are at a greater risk of not returning. This will lead to negative long-term employment and earnings prospects for them. At the same time, they are also vulnerable as they can be forced into early marriage, violence and early pregnancies.

On the domestic front, while both men and women stayed at home due to lockdown, women were more likely to take care of children and domestic chores, leading to an unequal distribution of household duties. Majority of the women are also employed in retail and hospitality sectors, which were badly hit by lockdown as remote working was not possible.

Consequently their unemployment rates rose by 15%, which would result in a loss of India’s GDP of about 8 % or ₹15 trillion. They were also 23.5% less likely to be re-employed when the lockdown lifted.


Only 6% of the poorest 20% have access to non-shared sources of sanitation, compared to 93.4% of the top 20%. 59.6% of India’s population lives in a room or less, which meant that necessary conditions to prevent the spread of COVID-19 cannot be followed. And when the government rolled out affordable COVID 19 services under Ayushman Bharat-PMJAY, the scheme left out the uninsured poor and the middle class, covering only the Below Poverty Line People (BPL).

The virus deepened the consequences of inequality, pushing burdens onto the losers of today’s labour markets. Those in lower economic strata were likelier to catch and die from the disease, and even those who survived were likely to suffer from the loss of income or health care.

At the same time, inequality acted as oil in this deadly fire by multiplying the coronavirus’s spread and deadliness. In a research conducted, it was found out that, in an epidemic inequality and poverty exacerbate the rates of transmission and mortality for everyone.

Extreme inequality is not inevitable. Governments around the world must seize this opportunity to build more equal, inclusive economies that end poverty and protect the planet. Our goal, at heart, should be of an equitable economic recovery coupled with rescue efforts.

At the onset, Governments must ensure that everyone has access to a COVID-19 vaccine and financial support if they lose their job. They must ensure that everyone gets to have a decent education, health and social care, and for that they should substantially increase their funds allocated for public services. And all this while ensuring the richest individuals and corporations contribute their fair share of tax to pay for it.

These measures are not and cannot be Band-Aid solutions for these tumultuous times but a ‘new normal’ in economies that wish to work for the benefit of all people, and not just the privileged few.

By Poorva Nagia

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