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Covid-19 Pandemic: India's Middle Class Shrinks By 32 Million Into Poverty

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The novel coronavirus-caused economic crisis is wreaking havoc on global living conditions, driving millions of people out of the middle class and into poverty, the US-based Pew Research Centre said.

According to a recent Pew Research Center report, India's middle class would have shrunk by 32 million in 2020 as a result of the slowdown, relative to what it would have been without the pandemic. This is responsible for 60% of the global decline in the number of people in the middle-income bracket.

Covid-19 Pandemic: India's Middle Class Shrinks By 32 Million Into Poverty
 

Meanwhile, the COVID-19 recession is estimated to have raised the number of poor people in India by 75 million (those with daily incomes of $2 or less).

Prior to the pandemic, it was predicted that India will have 99 million people in the global middle class by 2020. This figure was projected to be 66 million a year into the pandemic, down by a third.

Meanwhile, India's poor are estimated to number 134 million, up from 59 million before the recession. In 2020, India's poverty rate is expected to rise to 9.7%, up from 4.3 percent in January.

In January of last year, the World Bank projected that India and China will rise at nearly the same pace in 2020, at 5.8% and 5.9%, respectively.

The government of Prime Minister Narendra Modi has taken measures to boost the economy, forecasting an 8% contraction in the current fiscal year, which ends this month, before picking up to about 10% in the following fiscal year.

In China, people in the global middle and upper-middle-income tiers outnumber those in poverty and the lowest income tier.

After a decrease in cases until early this year, India is experiencing a second wave of infections in some states, and its total of 11.47 million is the third-highest after the United States and Brazil.

GoodReturns.in

Read more about: covid 19
Story first published: Friday, March 19, 2021, 16:58 [IST]
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