COVID-19 impact | India’s middle-class size falls for first-time since 1990s

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Due to the impact of the coronavirus pandemic, 32 million Indians have dropped out of middle-class while job losses pushed millions into poverty, according to report by Pew Research Centre.

The number of Indians who slipped below the poverty line stood at 75 million.

“Given that India and China also account for more than a third of the global population, with about 1.4 billion people each, the course of the pandemic in these two countries – and how each recovers – will have a substantial effect on changes in the distribution of income at the global level,” the report said.

The data suggest that the pandemic could reverse India’s growth trajectory while the Chinese economy has managed to grow by 2%.

“Prior to the pandemic, it was anticipated that 99 million people in India would belong in the global middle class in 2020. A year into the pandemic, this number is estimated to be have been 66 million, cut by a third,” it said.

The analysis is done by dividing the population of a country into four groups- poor, low income, middle income and high income. The poor live on $2 or less daily, low income on $2.01-$10, middle income on $10.01-$20, upper-middle-income on $20.01-$50 and high income on more than $50.

The pandemic has worsened the poverty numbers in India. From 2011 to 2019, the number of poor in India is estimated to have decreased from 340 million to 78 million.

“The projected rise in poverty in 2020 when comparing pre-pandemic and revised figures – 75 million – claws back several years of progress on this front for India. The retreat of India’s middle class in 2020 – by 32 million – also looms large in the context of the addition of 57 million to this income tier from 2011 to 2019,” the report noted.