Narendar Pani

Pitfalls of a ‘K-shaped’ recovery

| Updated on September 28, 2020 Published on September 28, 2020

In a K-shaped revival, we may see one section moving up and the other down. Rising inequality will heighten toxic behaviour

Cities can be very moody. There are times when they are full of empathy. Back in the 1960s the empathy made them sites of peace rallies and a fashion that celebrated the less privileged. Denims, once the material of the working class, became the symbol of middle and even high fashion. The deep sense of rebellion of the time was also built on concern for those who were less fortunate, particularly in economic terms.

Today the pendulum has clearly swung in the opposite direction. Leaders of the world, led by Donald Trump, are making a strong case for extreme selfishness. Scientists can claim, with considerable evidence, that wearing a mask does not just protect oneself from the Coronavirus, but also prevents infecting others. But to no avail. The US President rarely wears one himself and does little to encourage his followers to do so. Members of his team go so far as to insist that demanding people wear masks is an attack on civil liberties. One of them even went on to claim the lockdown was the worst attack on civil liberties since slavery.

Breeding grounds for hatred

The movement towards extreme individualism is evident in Indian cities as well. The lack of empathy has created a climate in which hate can grow. It has been politically useful to tap this environment to generate communal hatred. The BJP has clearly been at the forefront of this campaign.

But it would be a mistake to see this as only a matter of political tactics. The recent riots in Bengaluru had a prominent place for two factions of the Congress. And one only has to get into casual conversations in public places to realise that the us-versus-them runs deep, particularly in the middle class.

The practice of hate has also not been immune to individualism. Individuals were identified as targets of hatred, and the targets could be determined in communal terms, or around other convenient rhetoric like Lutyens’ Delhi. In keeping with India’s preoccupations, the targets of individualised hate have turned to Bollywood and some regional cinema. One writer has calculated that 70 per cent of the time on some major Indian television channels has been spent on Sushant Singh Rajput and just two percent on the economy. Rhea Chakravarthy may have been the target of this round of hate, but if she was not available Kangana Ranaut had a list of others who could have filled in.

Cinematic actors can be expected to be placed above economic actors in most Indian discourses. But this comes at a price. Far too little attention is being paid to the economic path that is being taken, a path that can, among other things, alter daily life in Indian cities. Official Indian discourse has continued to wait for a V-shaped recovery. Following the shape of that letter the government, or at least its Chief Economic Advisor, expects a recovery that is as rapid and steep as the decline.

Recovery blues

As the government waits for its good news, there is evidence of a K-shaped recovery being the most likely pattern that will emerge. In this recovery — following the contours of the letter K — one section of the economy will recover very quickly and perhaps even go well beyond where it was.

Another section would at the same time continue to go down steeply. There are signs that as India moves closer to being the country with the largest number of Coronavirus cases, industries that require minimal direct contact would recover quickly. In contrast, those based on personal contact could take years to recover. The IT industry and online retail would grow, while malls, construction and most of the informal sector would struggle to get back to their original levels.

The government could, of course, change the alphabet of the recovery by a well-directed substantial stimulus that would generate the demand to get the sectors on the decline to recover.

If the declining part of the K is removed, we would get a V shaped recovery. But unlike all the other major economies of the world, India has shown little inclination for such a meaningful stimulus. Probably prompted by the rhetoric against deficits, the government’s stimulus relied more on capturing the rhetoric rather than reviving the economy.

As our cities begin to set a new normal and increase everyday activities, we are likely to see a greater articulation of the consequences of a K-shaped recovery. As one section of the economy grows and the other remains in dire straits, individuals and groups can find new targets to hate. The current mood of extreme individualism may make it difficult for large scale organised protests. But the alternative of a large number of individualised acts of hatred is not a better option. Cities may well be forced to develop strategies to recover from a K-shaped recovery.

The writer is a professor at the School of Social Science, National Institute of Advanced Studies, Bengaluru

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Published on September 28, 2020
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