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Shrinking middle class due to inflation: Due to rising inflation in the country, the middle class is facing economic challenges. Due to which the usage pattern has also been affected. According to RBI data, the domestic savings of the country’s middle class families has reached a 50-year low. However, gross savings have remained stable. The demand for unsecured loans has increased to meet rising costs. As a result, the savings of the middle class are now being spent on loan EMIs.
Permanent-regular jobs declined
According to a report by Marcellus Investment Managers, today’s middle class is facing challenges such as technological disruption, economic recession and declining household savings. Regular and permanent jobs are the backbone of middle class income. But now the middle class has turned towards automation and technology. In which the ratio of regular and permanent jobs is very less. The recruitment of clerk-supervisors in offices and factories has reduced.
Domestic savings at 50 year low
According to RBI data, the country’s net domestic savings as a percentage of GDP has reached a year’s low. While gross savings are stable. Due to the increasing proportion of unsecured loans, people’s savings are being spent on EMIs.
‘When will PM pay attention to the middle class crisis?’
Due to economic challenges, the income and savings of the middle class are decreasing. Considering this issue, Opposition General Secretary Jairam Ramesh has asked the Prime Minister that when will PM Narendra Modi pay attention to this reality? For the last few weeks, there have been reports that due to decline in domestic savings, clouds of recession are looming in Indian companies, especially FMCG. Marcellus also reports that the middle class is facing economic challenges. The middle class of the city is facing economic blow, when will the Prime Minister address this reality?
FMCG sales decreased
FMCG sales have declined due to declining savings of the urban middle class. The share of the middle class in the total sales of FMCG is 2/3. But rising inflation, high interest rates and falling incomes have reduced consumption spending.
Cost reduction increased due to outsourcing and automation
National Statistical Commission Chairman P.C. Mohan said that many managerial jobs have been lost due to increased cost cutting due to outsourcing and automation. Wipro Chairman Premji also stressed on the disruptive role of AI and said that many jobs will be lost. In the future, white collar jobs will increase, while blue collar jobs will disappear.