The report is based on the analysis of World Bank data for India and China which has fared better
Team Clarion
NEW DELHI — About 32 million people were pushed out of the middle class in India as a result of the economic crunch due to coronavirus pandemic in 2020, said a report by Pew Research Centre drawing comparison with China which fared considerably better, adding that about 75 million people were driven below the poverty line.
In comparison, China saw only a 10-million decrease in the number of people in the middle income group despite being the first country struck by the virus. The poverty numbers in the country did not see much change either.
The report is the outcome of analysis of World Bank data of the two countries which account for more than a third of the global population, with about 1.4 billion people each.
“India is estimated to have seen a greater decrease in the middle class and a much sharper rise in poverty than China in the COVID-19 downturn,” the Centre said.
The report noted that nearly 59 million people had made it to the middle income level category from 2011 to 2019 but pandemic struck Asia’s third largest economy a huge blow.
According to Pew, the poor live on $2 or less daily, low income on $2.01-$10, middle income on $10.01-$20, upper-middle income on $20.01-$50, and high income on more than $50.
In 2020, India was stuck by the worst levels of recession in 40 years with high job losses while China managed to keep things under control. Before the pandemic started the World bank had predicted almost the same growth rate for both India (5.8 %) and China (5.9 %) for 2020. But after looking at how both countries were affected it revised the numbers in January forecasting that India is likely to witness a contraction of 9.6 percent and China will undergo a growth of 2 percent.
The Modi government has estimated a contraction of 8% for the current financial year ending this month and hope that the economy will start picking up by 10% in next financial year.