Pandemic relapse spells trouble for India’s middle class

New Delhi, Jun 12 (AP):
Ram Babu moved from his village to the Indian capital New Delhi in 1980, to clean cars. Soon, he learned to drive and got a job as a tour bus driver. Decades later, he set up his own company, Madhubani Tours and Travels.
In March 2020, a stringent nationwide lockdown to fight the coronavirus pandemic froze economic activity overnight. Babu’s business collapsed, and he drove his family back to their village.
‘Since March last year, we haven’t earned a single rupee,’ he said. ‘All of my three buses are standing still for more than a year. We are completely broken.’
India’s economy was on the cusp of recovery from the first pandemic shock when a new wave of infections swept the country, infecting millions, killing hundreds of thousands and forcing many people to stay home. Cases are now tapering off, but prospects for many Indians are drastically worse as salaried jobs vanish, incomes shrink and inequality is rising.
Decades of progress in alleviating poverty are imperiled, experts say, and getting growth back on track hinges on the fate of the country’s sprawling middle class. It’s a powerful and diverse group ranging from salaried employees to small business owners like Babu: many millions of people struggling to hold onto their hard-earned gains.
‘Coronavirus was the latest in a series of blows to hit India’s economy in recent years,’ said Mahesh Vyas, chief executive at the Center for Monitoring the Indian Economy (CMIE). ‘But the shocks brought on by the virus have had a very debilitating effect on the economy and I fear it is going to be long lasting.’
The economy was one of the fastest growing when Prime Minister Narendra Modi suddenly yanked most of India’s currency out of circulation in 2016, targeting corruption. A major tax reform whose kinks are still being ironed out followed. Modi’s flagship Make in India program to energize manufacturing has floundered and unemployment has surged.
The poor are suffering the most from the pandemic. But this is the first time in several decades that India’s middle class has taken such a big hit, said Vyas.
Babu says he fears his life is now moving in reverse. His dreams of buying a home in the city have been crushed by the loans he can no longer repay, he said in a phone call from his village. ‘I’m not used to living in the village now. Everything we own, everything we are, it’s all in Delhi,’ he said.
‘I’m not used to living in the village now. Everything we own, everything we are, it’s all in Delhi,’ he said.