Livelihoods: According to a report by Pew Research Centre, the COVID-19-led recession in India may have shrunk the country’s middle-class population by 32 million, pushing 75 million more people into poverty in 2020. Meanwhile, the number of people in China in the middle-income tier decreased by only 10 million, with the poverty level remaining unchanged.
The Pew report is based on an analysis of World Bank data.
The differences between the two countries can also be explained by the state and trajectory of their economies. India went through its worst recession in 40 years with massive job losses in FY 2020-21. In January 2021, the World Economic Update released by the International Monetary Fund estimated India’s economy would contract by eight percent in FY21 while China would expand by 2.3 percent in the same period.
Prior to the pandemic, it was anticipated that 99 million people in India would belong to the global middle class in 2020. However, a year into the pandemic, this number is estimated to be 66 million. Meanwhile, the number of poor in India is projected to have reached 134 million, more than double the 59 million expected prior to the recession. According to the report, the poverty rate in India rose to 9.7 percent in 2020, a sharp increase from the January 2020 forecast of 4.3 percent.
For its analysis, the research agency divides a country’s population into five groups by income: poor, low income, middle income, upper-middle income, and high income. The poor live on USD 2 or less daily, low income on USD 2.01-USD 10, middle income on USD 10.01-USD 20, upper-middle income on USD 20.01- USD 50, and high income on more than USD 50.
Read this to know how COVID-19 has affected women’s income, health, and security.