Nilekani criticises pandemic stimulus for widening wealth gap, distorted capitalism

Bengaluru, NT Bureau: In a discussion about the economic impact of the pandemic, Infosys co-founder Nandan Nilekani criticised the handling of economic shutdowns, while focusing on the consequences of massive government stimulus packages.

He argued that the moves to shut down economies was rooted in the belief that governments could issue large amounts of stimulus to offset economic losses. However, this assumption led to unexpected outcomes.

Nilekani, a key figure in the tech and economic sectors, expressed concern over the distribution of these stimulus packages and their societal impact, particularly in Western countries like the United States.

He highlighted that much of the pandemic-rellated economic support disproportionately benefited the wealthy. Referring to events during and after the 2020 pandemic, Nilekani pointed out that gover nment stimulus measures peaked during this period, creating significant wealth for the upper echelons of society while many ordinary people felt increasingly disillusioned with their economies.

His focus was primarily on the United States and other Western nations, particularly in Europe, where the disparity in economic recovery between the rich and the average citizen became more pronounced. He specifically cited polling data from the U.S. showing widespread dissatisfaction.

Nilekani’s concer n stems from the stark inequality exposed during the pandemic. While many received stimulus checks, much of the wealth creation occurred among billionaires and large corporations.

He noted that many young Americans are increasingly disillusioned with capitalism, with some preferring socialism instead. According to Nilekani, this shift is troubling for a country long regarded as a beacon of capitalism and free enterprise.

He further explained how government and central bank interventions, such as buying corporate paper from large companies, disproportionately benefited wealthy individuals and businesses, leaving the rest of the population frustrated.

He pointed out that the number of billionaires created in 2020 reached an all-time high, reflecting the skewed benefits of the pandemic stimulus. Nilekani emphasized that capitalism has not failed but has become distorted.

He argued that the current system favors big businesses and incumbents over competition and new entrants, leading to stagnation.

This decline in economic churn, where fewer new companies emerge while older companies maintain dominance, is a key factor in the erosion of true competitive capitalism.