Rise in middle class vulnerability

Amid rising geoeconomic uncertainty that risks deepening domestic inequality in emerging market economies, India’s macroeconomic performance is still widely seen as a story of progress, with its recent growth model often held up as a success in reducing poverty, and by conventional measures, that claim does hold with its caveats.

The share of Indians living below the World Bank’s lower middle income poverty line has fallen sharply from over 50% a decade ago to roughly 30% in recent estimates. Welfare programs through improved last-mile distributive connectivity now reach hundreds of millions through subsidised food, direct transfers and financial inclusion. Hence, extreme deprivation may have declined amongst vulnerable groups.