Indian middle class shrinks by 32 million due to Covid-19 pandemic: Pew

Report shows the size of global middle class fell for the first time since 1990s

Financial woes brought by last year's coronavirus pandemic have pushed about 32 million Indians out of the middle class, undoing years of economic gains, a report showed on Thursday, while job losses pushed millions into poverty.

The number of Indians in the middle class, or those earning between $10 and $20 a day, shrunk by about 32 million, compared with the number that could have been reached in the absence of a pandemic, the US-based Pew Research Centre said.

A year into the pandemic, the numbers of those in the middle class has shrunk to 66 million, down a third from a pre-pandemic estimate of 99 million, it added.

“India is estimated to have seen a greater decrease in the middle class and a much sharper rise in poverty than China in the Covid-19 downturn,” the Pew Research Centre said, citing the World Bank's forecasts of economic growth. Nearly 57 million people had joined the middle-income group between 2011 and 2019, it added.

In January last year, the World Bank forecast almost the same level of economic growth for India and China, at 5.8 per cent and 5.9 per cent respectively, in 2020.

But nearly a year into the pandemic, the World Bank revised its forecast this January, to a contraction of 9.6 per cent for India and growth of 2 per cent for China.

India faces a second wave of infections in some industrial states, after a decline in cases until early this year, and its tally of 11.47 million is the highest after the United States and Brazil.