An economist tells DesPardes that India’s 50 per cent middle class is decimated with drastic income contraction.
“18 million have become unemployed in 3 months. Nearly one third of its formal labor community is unemployed. The Coronavirus pandemic and policy missteps have created the worst economic crisis in India’s history for the middle class”.
A report in the local media says middle income households, particularly at the higher income levels, have suffered the most, because they had a lot more to lose. Their loss is in excess of 30 percentage points,
Even before the pandemic hit India, says the report, the country was already witnessing a surge in economic hardships — “unemployment was at a four-decade high, key indicators signaled a prolonged slowdown and companies were periodically laying off employees since mid-2019”.
Latest data from the Center for Monitoring Indian Economy, a Mumbai-based think tank, showed that the incomes of India’s middle class have been worst hit — and it could worsen if the situation does not improve.
What India now has is a classic “western-style” slowdown that post COVID-19 has turned into a full-fledged recession, says another report in The Indian Express.
“The real GDP decline of 5-10 per cent that various agencies are projecting for 2020-21 would be the country’s first ever not triggered/accompanied by an agricultural or a BOP crisis”.
The current contraction is totally different from the previous ones. It’s a crisis without villains, says the paper.
According to the economist, “It (India’s economy) is heading toward a collapse”, –he first shared this view with DesPardes months earlier, even before the pandemic.
This week he points out that “India is hiding the true number of Corona Pandemic and Casualties as Crematoriums are overwhelmed and Graveyards become full beyond capacity”, and refers to a BBC report.
According to him, Indian economy’s collapse is gathering pace. He hangs his hat on “lowest Business Confidence Index, lowest Consumer Confidence Index, lowest Manufacturing Growth Index, Lowest Export Demand Index and Highest Inflation rate”.
He also points out that “PM Modi’s policy missteps and fudging of numbers on the highest level are two major reasons”.
De-industrialization and “Make Outside India” could be the next step, he expects.
ALSO READ: Joe Biden Wows Critics, Forget the Gaffes…