India’s middle class, once the backbone of the country’s economic engine, is facing an alarming crisis. Saurabh Mukherjea, founder of Marcellus Investment Managers, sounded the alarm in a podcast with Bharatvarta, saying, ‘The middle class is coming under the pump. This constituency is becoming a casualty of automation and technological change.’

Understanding the Crisis

Mukherjea highlighted a grim reality: flagging sales of FMCG goods and entry-level cars, stagnating employment in IT services, and dwindling campus placements for engineering graduates. 

Automation and artificial intelligence, he warned, are hitting middle-class jobs hard. ‘This requires serious thought,’ Mukherjea said. ‘AI could become a middle-class job killer unless handled carefully.’

The Changing Job Landscape

The issue goes beyond technology. According to a report by Marcellus Investment Managers, routine jobs like clerical and supervisory roles are vanishing, replaced by cost-cutting measures like outsourcing and automation. Wipro Chairman Rishad Premji echoed this sentiment, stating, ‘Some jobs will disappear,’ emphasizing the vulnerability of white-collar roles.

Economic Challenges and Their Impact

Economic challenges compound the crisis. Corporate earnings in Q2 FY25 saw their steepest slump in two decades, apart from crises like the 2008 crash. Household debt has reached alarming levels, with net savings as a percentage of GDP hitting a 50-year low. 

RBI data shows that while gross savings remain steady, mounting unsecured loans are squeezing disposable income, leaving families with little financial cushion.

Consumption Patterns Reflect the Crisis

Consumption patterns reflect the fallout. FMCG giants Nestlé India and Hindustan Unilever have reported sharp slowdowns in urban spending. Nestlé’s MD Suresh Narayanan pointed to a ‘shrinking middle class’ as a key driver of decelerating growth in the food and beverages sector. Hindustan Unilever CEO Rohit Jawa noted that ‘urban growth has trended downward, especially in larger cities.’

The Call for Action

India’s political and corporate leaders face mounting pressure to address this crisis. Mukherjea warned that the middle class is being neglected, overshadowed by electoral focus on the underprivileged. ‘The middle class is becoming an orphaned child,’ he said, urging mission-mode strategies to prevent AI and economic trends from further devastating this critical demographic.