A report published on Thursday revealed that financial distress coupled with the coronavirus crisis has pushed around 32 million Indians out of the middle class. This has taken years of economic gains.

The report stated that the number of Indians belonging to the middle-class strata, those who earn between $10 and $20 a day, shrunk by around 32 million, according to a study carried out by the US-based Pew Research Centre.

The report said that the pandemic year 2020 reduced the number of those in the middle class to 66 million, down a third from a pre-pandemic estimate of 99 million.

Covid impact on household budgets

“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,” the Pew Research Centre said, citing the World Bank's forecasts of economic growth.

The report further added that almost 57 million people had joined the middle-income group between 2011 and 2019.

The study is followed by the forecast by the World Bank that had revised India’s GDP and noted a contraction of 9.6 per cent, owing to the pandemic.

The researchers of the new study estimated that the number of poor people, with incomes of $2 or less each day, has surged by 75 million due to the recession triggered by the virus.

The worrying spike in global food prices

According to the Business Standard report, a spike of almost 10 per cent in domestic fuel prices this year, job losses, and salary cuts have stressed millions of households.

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