Congress: Urban middle class 'shrinking', when will PM Modi recognise this reality?

The Congress on Wednesday (November 27) launched an attack on the Union government, warning that India’s urban middle class was "shrinking" and asking Prime Minister Narendra Modi to accept this reality.

This development had already affected the consumption patterns of the middle class and net household savings as a percentage of GDP were at their lowest level in nearly 50 years, the party said.

Also read: Congress flays Modi govt's economic policies, wage stagnation, inequality

Congress general secretary Jairam Ramesh said that leading lights from India Inc had flagged the tremendous slowdown in household private consumption, including in the previously red-hot FMCG sector.

New disturbing findings

"Now, a new report by the well-regarded Marcellus Investment Managers reveals three major economic challenges that have affected consumption patterns," he said.

Also read: Kharge attacks PM Modi: 'Modinomics is a curse to India's economy'

Mounting unsecured loans have pushed net savings into the red, leaving families with less disposable income, Ramesh said.

He pointed to a cyclical economic downturn and said India's post-Covid recovery has sputtered out.

Usual jobs fade away

Corporate earnings in Q2 FY25 recorded the steepest slump in two decades, apart from crises like the 2008 financial crash, he said.

Ramesh said routine and repetitive jobs that once formed the backbone of middle-class employment were increasingly being replaced by cost-cutting measures like automation and outsourcing.

"The urban middle class has been disproportionately affected and is 'shrinking.' When will the PM recognise this reality?" the Congress leader asked.