India’s middle class has always been an essential part of India’s economic growth.
In the last two decades, India’s economy has seen maximum exposure and growth as the Indian Middle class ran with the success story that catapulted itself into an aspirational living, making it an important driver of the country’s economic growth.
The Indian Middle class is not based on ideology but instead draws from its aspirations.
Aspirations of better education aimed at better professional growth and hence a better standard of living.
The world economic growth and India’s economic growth are strongly supported by increased consumption and savings by the middle -class. A robust middle class is the source of economic growth. It provides a stable consumer base that drives productive investments.
In the last two decades, the Indian middle class grew stronger as Indian markets opened. With the multinationals coming in, it provided for better employment opportunities and higher incomes.
However, the pandemic has severely affected the middle class in the country.
The economy was already seeing a slowdown. A churning led on global cues; India’s economy independently was also witnessing a slow burn.
With the advent of the pandemic, it has almost put a stop and watch scenario into effect.
Through its savings capacity and aspirations, the middle class, the driving force for any economy, has undergone maximum brunt.
White-collar jobs have been put on hold, and many have lost their employment and hence their income source.
A typical Indian Middle class had, in recent years, seen an increase in its disposable income as women too joined the workforce. Hence, the disposable income had increased in many households.
The pandemic, though, has changed the picture, with the lockdown, even as many worked from home, the truth is that numerous companies across all major industries struggled to cope with the lockdown and decrease in business.
As the lockdown progressed into weeks and months, many companies resorted to reducing salaries, benching employees, and even cutting jobs. A worrying scenario for the Middle Class caught between EMI’s, dipping savings, and the worst situation of all – job loss.
Suddenly many find themselves in ‘redundant roles’ and in a grim situation where employment opportunities are limited in the current context.
The harsh reality has led to many committing suicides in the wake of fear and panic.
The Indian economic output shrank by 24%; the steepest fall noted as compared to the world’s largest economies, in the three months to June compared with the same period last year.
It is ironic that the migrant casual labor force that faced the maximum heat at the beginning of the pandemic, it is now the middle class that finds itself struggling even as the casual laborers are beginning to pick up work.
Efforts to revive the economy have been thwarted by political apathy and a rise in infections. India is soon to surpass even the US with the highest number of cases.
Despite having degrees in education, the youth is particularly vulnerable, and several pursuing higher education are now forced to abandon their educational aspirations. Several are currently working as drivers or with food delivery platforms.
The picture is equally bleak for professionals working in IT companies or other major companies across sectors.
With many being benched or given the pink slip, the possibility of finding roles with similar salary structures or even finding a job in the current scenario is giving sleepless nights to many. The stress of the situation has severely impacted the Middle class.
Despite the Government launching ‘the made in India’ campaign, no significant improvement has been seen in the economy.
Coupled with political bickering and a failure to cooperate and differences within and across political parties, the Indian economy and the middle-class face uncertainties.
India’s economic recovery will be slow and painful as the blow to the Middle class is sharply weakening demand and further complicating India’s economic recovery.
Will the political leadership and the opposition unite to get the country back on track, or will their party politics and individual campaigns further derail the economy?
It remains to be seen.