‘The poor are catching up. India’s middle class isn’t’: Fund manager flags policy blindspot
The rich getting richer and the poor getting poorer is a familiar refrain. But fund manager Rahul Jain offers a twist: “Even the poor are now outpacing the middle class.”
In a LinkedIn post, Jain points out that over the past 11 years, India’s middle-income segment has seen almost no real income growth—even as the low-income group moves forward at a faster pace.
According to him, the data tells the story. For the low-income group earning under ₹5 lakh a year, income rose from ₹2.4 lakh to ₹3.6 lakh, a compound annual growth rate (CAGR) of 4.0%.
In contrast, the middle-income group—those earning between ₹5 lakh and ₹1 crore—saw their income rise from ₹10.2 lakh to ₹10.7 lakh, reflecting a CAGR of just 0.4%. Even high-income earners, with incomes above ₹1 crore, experienced marginal growth from ₹2.69 crore to ₹2.83 crore, a CAGR of 0.5%.
Jain notes the irony: despite contributing 53% of all tax filings in the country, India’s middle class has experienced near-zero income growth in over a decade. Meanwhile, inflation has steadily pushed up the cost of essentials—healthcare, education, and EMIs. Simultaneously, job markets are being reshaped by AI and automation, squeezing out traditional roles once filled by the middle class.
“They’re getting squeezed,” Jain writes. “They’re excluded from welfare schemes aimed at the bottom segment and lack the leverage that benefits top-tier earners.”
He adds, “Many from the lower-income bracket are moving up into the middle-income segment—but once they’re in, their incomes stagnate. They are climbing the ladder. But the rungs above are missing.”
To him, this is not just an economic trend—it’s a policy blindspot. The middle class plays a central role in building a nation’s future through investment, consumption, and savings. Yet it’s increasingly caught in a space where upward mobility is slowing and the cost of living keeps climbing.
