Covid rips havoc, India's middle class shrinks by 32 million: Research

The Indian middle-class slumps by a record 32 million due to Covid-19 pandemic downturns, according to the US-based Pew Research Center.

At the same time, low-income tier, people with an income of Rs 150 or less a day, rose by 75 million, which also account for 60% of the global increase in poverty.

The report referred to a spike in participation in India's rural employment programme, MGNREGA -- originally intended to combat poverty in agricultural areas - as many lost jobs in urban and semi-urban areas. "The number now participating is setting record highs in the programme's 14-year history," it said.

The Covid-19 pandemic had a major impact on India but the effect was not so strong on neighbouring China, Pew Research stated. It said while India saw a deep recession in 2020, China was able to "forestall a contraction".

In the post-recession scenario, the middle-class group is shrinking in India and poor income group is ballooning. "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 have been 66 million, cut by a third. Meanwhile, the number of poor in India is projected to have reached 134 million, more than double the 59 million expected before the recession," the article suggests.

In just one year since the pandemic, the poverty rate in India has risen to 9.7% in 2020 from the January 2020 forecast of 4.3%.

In 2020, most people in India, 1.20 billion before the pandemic were in the global low-income tier.