Financial experts and market analysts are citing a shrinking of the middle class segment that forms a third of India’s population. This should be cause for serious concern and would effectively rubbish the Modi government’s claim and citations of a fast-paced economic growth. When the nation grows, its people grow. When its economic strength rises or diminishes, the ‘trickle down’ effect reaches up to the last man in the bottom of the society. Fact on the ground is that there is no palpable improvement in the lives of the ordinary people in recent years. Wages are not increasing in most sectors – and this is not simply a post-pandemic phenomenon. The middle class that depends on wages is hard-pressed. Money circulation is reducing in markets. This is the anti-thesis of a growing economy. Worse, food inflation is “squeezing” middle class budgets while the poor survive on subsidized or free ration. The growth is artificial and limited to the upper 15 per cent of the society – comprising highly paid executives, governmental functionaries and the business class. The rest are forced to have a hand-to-mouth existence. “Urban consumption” of goods in the market has come down while the rural markets are less affected. The middle class in India’s teeming cities – that forms more than one-third of the population – is bearing the brunt.
Significantly, the analysts note in media reports published this weekend that people in urban spaces have less money to spend and are moving away from branded products to cheaper goods. Rather than creating more employment opportunities and creating conditions for periodic upward revision of salaries, the government is adopting short-cuts. An example is the national rural employment guarantee scheme, MGNREGS, under which the government spends a whopping Rs 100,000 crore a year to provide work to villagers on minimal wages. This, complemented with free or subsidized ration, keeps the poor “voiceless.” To interpret or project this as a sign of people’s satisfaction or of national growth is far from true. The government is failing in industrialization. Investments are not picking up due to the red tape and massive corruption in the establishment. The Modi government has no panacea for such ills.
Analysts are clear when they say the “key macro-drivers” of the economy remain “unfavourable.” Food inflation was cited above 8 per cent, and retail inflation has hit a 14-month high of 6.2 per cent. Every government has a way to claim it is a performing establishment and “doing the best.” Claims are made about economic super power status for the nation in the near future. It is time the government stops bragging and takes a close look at ground realities. India’s poor and ordinary masses that form three-fourths of the population deserve a better deal from their governments.
