THE IMPACT OF ECONOMIC POLICIES ON REDUCING INEQUALITY IN INDIA DURING RECESSIONS

Abstract

Economic inequality has been a persistent challenge in India, particularly during periods of economic recessions. Since the 1991 economic reforms, India has experienced significant growth alongside recurrent economic shocks, such as the 2008 global financial crisis, the COVID-19 pandemic, and other domestic challenges. These downturns have disproportionately affected vulnerable populations, exacerbating income and wealth disparities. This research paper explores the impact of economic policies in mitigating inequality during recessions, focusing on India’s fiscal, monetary, and structural responses. Key initiatives such as the Pradhan Mantri Garib Kalyan Anna Yojana, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), and Emergency Credit Linked Guarantee Scheme (ECLGS) are analysed for their role in supporting rural livelihoods, small businesses, and marginalised communities. The study also examines foreign direct investment (FDI) trends and export dynamics as tools for economic recovery, highlighting the resilience of high-growth sectors like pharmaceuticals and engineering goods. Price stabilisation measures, such as subsidised food and fuel, further underscore the government’s commitment to addressing inflation-induced inequalities. By combining quantitative data and policy analysis, this research provides insights into how India’s strategic interventions have reduced economic disparities and fostered resilience during downturns. The findings offer valuable lessons for designing inclusive policies that balance economic growth and equity in emerging economies.