Global recession in 2008 never touched India but 2021 pushed 32 million into poverty. The gap between the rich and the poor is insidiously widening while the middle class is being eliminated. Experts blame it on bad economic policies and faulty planning during the lockdown.
The US-based Pew Research Centre said that on average, Indians in the middle class earn around $10 and $20 a day, and this has “shrunk by about 32 million, compared with the number that could have been reached in the absence of a pandemic.” “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.
It also said “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,” quoting the World Bank’s forecasts of economic growth. Nearly 57 million people had joined the middle-income group between 2011 and 2019, it added.
The coronavirus pandemic may have shrunk India’s middle-class population by 32 million and driven 75 million below the poverty line in 2020, a Pew Research Centre report said, as a severe recession-ravaged Asia’s third-largest economy. According to the report before the pandemic, it was anticipated that 99 million people in India would belong to the global middle class in 2020. A year into the pandemic, this number is estimated to be 66 million, cut by a third.
The present economic structure of the government has put extra tax burdens on the common citizens. Millions have lost jobs many even before the pandemic, no healthcare relief, extremely high costs of medical care, rentals keep rising, good and commodities zooming up. Good schooling for children cost fortunes, fuel rates are the highest in the world, and in the history of India, no income tax relief, FD and PPF rates very low and EMIs are very high.
After a short decline in the pandemic, presently, India faces a second wave of COVID-19 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.
The Congress party made a comparison to its era with the BJP government and said that the Congress-led UPA (2004 – 2014) lifted 27 crore people out of poverty, whereas the Modi-led BJP (2014 – 2021) has pushed about 32 million Indians out of the middle class into poverty!
Former Prime Minister Manmohan Singh of the Congress-led UPA, with his astute economic scholarship ensured that India sailed through the global recession untouched. Fortified by the schemes implemented by Former PM Manmohan Singh, India lifted 271 million people out of poverty between 2006 to 2016 said by the UN Report.
Reasons why India’s middle-class is sinking into oblivion:
Unplanned Lockdown: Lockdown closures on workplaces and factories were not planned as red corona zones should have been differentiated from safe green zones and people allowed to work accordingly. People should have been mass tested with only corona cases sealed off. Closing down the nation led to a loss of economy, loss of investment, sales, loss of salary, and jobs. There was no generation of new work and thus affected millions of lives. The migrants and poor were left to fend for themselves. It was only after national outrage that the government took some measures to help them out.
Middle class never recovered from demonetization: Since demonetization, millions lost money. Even middle-class Indians have a habit of storing money in homes, and when they lost all their savings, they had nothing to reinvest in for new businesses. The middle class might have made it through the pandemic as they did through the global recessions but emptied of treasure chests at home, they were left bare and desolate in desperate times.
Cost of fuel in India highest globally and also in Indian history: When fuel rises, it affects every area of living. Transport prices go up and with that, goods and commodities rise up. Due to the high cost of fuel, milk prices are going to rise to Rs. 80/- per liter, unheard of before. Milk will become an unaffordable luxury, curd, ice creams, and dairy milk products will obviously hit the ceiling!
Millions lost jobs: Once again, the joblessness races back before the pandemic, which only intensified the issue further. While India sunk into its deepest recession in about 45 years with the pandemic snatching away millions of jobs, China was able to prevent a downslide and recovered back swiftly. India however is unable to bounce back due to the complexities of not creating factories, IT companies, or the work industry effectively over the last few years.
In 2017-2018, 50 lakh workers lost their jobs and in 2017, and in 2018, 1.1 crore jobs lost in the unorganized rural sector! The ghost of unemployment is haunting millions today.
Costs of living and taxes too high: The government has increased tax burdens on the common people as well as goods all over are increasing. Schools, hospitals, etc., are becoming unaffordable. Students are suffering so as the parents as online study Internet charges are now increasing.
A graph shows that the Niti Aayog’s SDG Index 2019 says at that time that more Indians have fallen into poverty, hunger, and income inequality in the last 2 years has now worsened.
This is after a remarkable reduction in poverty between 2005-06 and 2015-16 (because of the UPA policies)
Losses due to GST: The loss GST has incurred losses all over the country. Students are suffering so as the parents as online study internet charges are now increased
Act of privatization leading to instability: People on streets, all this is affecting the economy, when people are unhappy, fall ill, and cannot work, Today, the present bank employees have called for a strike against the privatization implementations of the government, which would again affect the jobs of millions of middle class.
Eric Stephen, National Secretary of National Students Union of India said, “Congress lifted people out of poverty and brought them into Middle Class!!!
BJP lifted crony capitalists and made them richer while pushing Middle Class into poverty!!!”
The gap between the rich and the poor is insidiously widening while the middle class is being eliminated. Is this what the government secretly plans on?
3.2 crore Indians were forced out of the middle class due to Covid-19. Under the BJP govt, the rich get richer while the middle class is exploited. Their income is taxed heavily, they pay exhorbitant fuel excise & yet are constantly betrayed by the govt!#MiddleClassKeBureDin
— Dr. Shama Mohamed (@drshamamohd) March 20, 2021
Congress lifted people out of poverty and brought them into Middle Class!!!
BJP lifted crony capitalists and made them richer while pushing Middle Class into poverty!!! #MiddleClassKeBureDin pic.twitter.com/R1tVa5zFfj
— Eric Stephen (@Ericjusa) March 20, 2021