21 MAR,2021 | MEDC
According to a Pew Centre Research Report, the pandemic may have shrunk India’s middle-class population by 32 million. The report, based on an analysis of World Bank data said that 75 million Indians were driven below the poverty line in 2020. Covid has certainly accentuated socioeconomic inequalities, but the shrinking of the middle-class that drives consumption in India, could have a medium-term impact on the growth prospects of our economy. In comparison, China has fared better, with its middle-class having shrunk by just 10 million, and its poverty level remaining virtually unchanged in 2020. Pew Research added the caveat that the estimates are subject to a degree of uncertainty, based on the actual growth of the economy and the effectiveness of social spending carried out by the government during the pandemic-induced slowdown. There is reason for optimism. The government has acted responsibly in the past year, and green shoots of recovery are gradually becoming visible throughout the economy. Of course, much more needs to be done to ensure a sustained revival from the slowdown.
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