The income from the middle class of India – which earns between 5 lakh and 1 crore of 1 ₹ per year – has remained flat in the last decade, according to Sarabh Mukherjea, founder and CIO of Marcellus Investment Managers.
In a conversation with the Federal, Mukherjea stressed how the stagnation of income in this group, which represents 75% of the country’s income declarations, is discreetly ignored even if wage growth continues below and above this level of income.
“We are a free market economy now, not a socialist. The market has motivated technological revolutions in factories, and now it does the same in white-collar offices via AI,” he said. But this revolution is tightening India employees with intermediate income – compare wages, reduce the availability of jobs and ultimately erode upward mobility.
Mukherjea explained that he had studied a decade of income tax data and defined the “real” middle class as equidistant of the poor and the rich. This cohort – about 40 million income declarations – is now taken in a salary trap. “Everyone does not obviously stagnate, some increase, some decrease. But on average, income between 5 lakh and 1 crore of 1 ₹ stagnated.”
The forces lead to this stagnation? Technology and political concentration. Entry -level computer jobs which once offered 2-3 Lakh per year – Critical springboard for the Indian middle class – disappear while robots and automation take over. “All repetitive work is threatened. Coding is only the first of many white collar roles that AI will disturb,” warned Mukherjea.
Meanwhile, he observed that income below 5 Lakh increases regularly – “and rightly so” – because this is where the votes are. “About 60 Indian crores earn below 5 Lakh. It is 90% of the electorate. No politician can afford to ignore this voting bank. ”
At the other end, revenues above 1 crore ₹ also climb. “Mainly businessmen, not salaried managers,” he noted. This leaves the environment in a hurry – the salaried class with aspirations but the narrowing of the economic bandwidth.
“If you earn between 5 ₹ Lakh and 1 crore ₹ in India, you should proudly call part of the middle class,” said Mukherjea. But pride aside, the data message is clear: the middle class of India no longer goes up the ladder – it is slowly relevant.
