- The lower and middle class is under enormous stress courtesy of the unrelenting piling up of challenges brought about by the pandemic over the last year and a half. For that matter, every other class of society is undergoing veritable duress is par for the course statement as none can lay claim to having escaped the vagaries of the pandemic in one or the other way. Every vertical of economy, industry, business, and people are under the hammer is stating the obvious. The less said the better about the underprivileged and lower strata of the society as the burden on them is even more debilitating as compared to others. To their credit, none are sparing efforts to get over the challenging times in their own ways.
PC: Cynthia Brumfield
- A recent report by Pew Research Centre said 2020’s first Covid wave saw India’s middle-class shrink from 99 million to 66 million. The second wave followed hitting the middle class with a brute force more or less making it severely impacted than the first wave. Of course, Pew’s definition of the middle class is not inalienable as many economists have concluded India’s middle class is bigger than the mentioned numbers. They redefine class markers to better align with India’s low per capita income-generating people. Irrespective of the class of people – lower, middle, and upper – the basic story remains unchanged.
- The economic slowdown that preceded two Covid waves has rendered this vital class gasping for breath and struggling to make ends meet. It is a vicious cycle wherein the lower the incomes of the stressed class, the capacity and inclination to consume and save are down too. India’s first recession in forty years has left its middle class, which experienced upward mobility for thirty years since the liberalization and globalization of the 1990s, fearful of the future. Debilitating economic consequences of a shrinking and hurting middle class are manifold though as consumption is recorded a just under 60% of GDP.
PC: Amy Coles
- Note that the middle and upper-middle classes are aspirational consumers willing to pay for high-value products and services. The Government of India’s plan to boost local industrial production and housing on the back of the Atmanirbhar Bharat mission will take a huge hit in the absence of these classes constrained to buy more mobile phones, computers, TVs, washing machines, ACs, homes, and cars. The vibrant middle class in India is where one would find an unabashed spending class of entrepreneurs and professionals encompassing an entire ambit of people contributing hugely to the nation’s economic growth story.
- From startup wonder-kids to district magistrates, from doctors who are doing yeomen services during Covid times to telecom engineers keeping the communication networks running, to army personnel to teachers taking online classes are products of middle class emphasizing on education and striving for a better life. Thus, the GOI has no option but to spend big to kickstart economic activity to shore up the middle class who are playing sage at the moment by deferring consumption. A fiscally engineered turnaround, combined with consistently high vaccination rates will help bring zest back to a class that is a must to flourish if we are to recover.