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Andy Mukherjee

Luxury and Hunger: Two Faces of an Unequal Pandemic

India’s economic gap is widening under Covid, with $400,000 SUVs selling out and the bankrupted selling their homes.

Workers sanitize the premises of the Taj Mahal.

Workers sanitize the premises of the Taj Mahal.

Photographer: Pawan Sharma/AFP/Getty

Mercedes-Benz AG recently introduced its Maybach sport utility vehicle in India — right in the middle of a fierce second wave of the pandemic. The 50 cars the German automaker wanted to sell by the end of 2021 were lapped up in a month. It turns out that just as the rich were scrambling to own these $400,000 wheels, annual per capita income was sliding below $2,000, with the country falling behind neighboring Bangladesh.

Emerging economies have historically tolerated higher inequality, hoping to hit the inflection point in the Kuznets curve, beyond which incomes keep rising but disparities fall. Whatever the merits of the controversial hypothesis, the gap opened up by Covid-19 is no price of progress. The situation that India finds itself in today — brisk sales of luxury cars and soaring net worth for billionaires amid widespread joblessness and depleted savings — reflects a lack of fiscal imagination. The state’s reluctance to do more could prove costly. Poor households ate less last year, and economists are warning of another wave of intense food deprivation.