WASHINGTON (GNB): A new Pew Research Center analysis finds that the middle class in India is estimated to have shrunk by 32 million in 2020 as a consequence of the downturn, compared with the number it may have reached absent the pandemic.
This accounts for 60% of the global retreat in the number of people in the middle-income tier (defined here as people with incomes of $10.01-$20 a day), says the study.
Meanwhile, the number of people who are poor in India (with incomes of $2 or less a day) is estimated to have increased by 75 million because of the COVID-19 recession. This, too, accounts for nearly 60% of the global increase in poverty. Perhaps not surprisingly, media reports from India point to a spike in participation in its rural employment program – originally intended to combat poverty in agricultural areas – as the many who have lost jobs in the reeling economy seek work. The number now participating is setting record highs in the program’s 14-year history, it added.
The change in living standards in China is more modest than in India, according to the study. The largest impact in China is the estimated addition of 30 million people to the low-income tier (incomes of $2.01-$10 a day). The number of people in the middle-income tier likely decreased by 10 million, and poverty was virtually unchanged, says the study.
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.
“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.
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