India’s middle class is facing a growing economic crisis marked by stagnant incomes, rising living costs and increasing debt burdens. Despite outward signs of prosperity – such as annual holidays and EMI-shopping – many families are experiencing tensions beneath the surface
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Stagnant Incomes Amid Rising Costs
Over the past decade, the income of individuals earning Rs 5 lakh to Rs 1 crore per annum has grown by just 0.4% annually. In contrast, essential expenses such as food have grown by almost 80%, significantly reducing purchasing power. This inequality has led to silent erosion, where savings are forgone, medical visits are delayed, and money needed for everyday expenses is missed.
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Escalating Debt and Financial Stress
To maintain their lifestyles, many middle-class households are increasingly reliant on debt. Debt is projected to increase by 75% between 2021 and 2024, with household debt reaching 43% of GDP by mid-2024, up from 35% in 2020. This debt reliance is exacerbated by the rising cost of essential goods, which eat up around 65% of household expenditure, leaving little room for savings or investment.
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Job Market Challenges and Automation
The job market has not kept pace with the growing workforce. Graduate unemployment stands at over 40%, and white-collar jobs are increasingly threatened by automation and outsourcing. This has led to a collapse in job creation and income mobility, undermining the traditional middle-class aspiration of economic security through education
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Lack of Policy Attention
Despite comprising a significant portion of the population—31% in 2021, projected to reach 60% by 2047—the middle class often finds itself overlooked in policy discussions. While welfare schemes target lower-income groups and economic policies favor the wealthy, the middle class is left to absorb economic shocks without substantial support.
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