One of the biggest problems affecting middle-income groups is that their incomes have stopped growing at the rate at which their expenses are rising. There is no longer a corelation between productive work and income gains.
According to income tax data and other reports, the average income for middle-class earners has stayed around Rs 10.5 lakh per year for more than ten years now. Adjusted for inflation, the real value of their earnings has dropped sharply. https://scroll.in/article/1082346/a-hidden-debt-crisis-is-silently-wrecking-the-dreams-of-indias-middle-class
The consumer purchasing power of this income group has fallen by about one-third over the past decade. This means people can afford much less today than they could ten years ago, even though their salaries have stayed the same. As a result, many families are cutting down on essential expenses like healthcare, education and daily consumption just to balance their monthly budgets.
The constant stress of trying to manage monthly expenses with limited income is taking a mental toll. Many middle-class families live with daily financial anxiety – the worry of emergency expenses, the guilt of cutting corners and the fear of slipping further down the economic ladder. These burdens rarely appear in official statistics.
Government policy, so far, has not responded meaningfully. The new tax regime in Budget 2025 raised the zero-tax limit to Rs 12 lakh. While this sounds like major relief, it helps only those who do not claim exemptions and deductions.
Together, these data-trends show that the average middle class person is losing their economic strength and socio-emotional stability. What was once recognised as an aspirational class known for planning, saving, and striving is now borrowing, and struggling just to stay afloat and this indicates a serious concern.
15/05/2025