High Property Prices To Stagnant Salaries: Investment Banker Explains Why Indian Middle Class Is Getting Poorer

An investment banker recently took to LinkedIn to explain why middle-class families in India are getting "poorer". In a detailed post, Kanishk Kar, a Sales Associate at Yes Bank, highlighted the harsh reality of being a working professional in India. From a surge in property prices to stagnant salaries, Mr Kar provided a quick breakdown explaining why the middle class is "feeling the squeeze"."It's getting harder to breathe in the middle. Not in the smog of Indian cities. But in the middle class - once seen as the backbone of India's rising economic story," he wrote. 

According to Mr Kar, there's no one single reason why India's middle class is stuck in a weird limbo. First, he explained that in today's time, "incomes haven't kept up with inflation". The average rate of consumer inflation since 2016 has been about 6%, but the average salary growth remains close to 3-4% for many white-collar roles, he stated. "The cost of basics - food, rent, fuel, school fees - is rising faster than wages. Every month, that "buffer" money is getting thinner," he said. 

Second, Mr Kar said that the Indian middle class is stuck in a "weird limbo". He explained that while the middle-class pays 30% tax on their Rs 15 lakh salary, the ultra-rich pay nothing on their capital gains. "They've got trusts, tax havens, and loopholes working overtime. The result? The middle class is footing the bill - but isn't getting much back," he stated. 

Further, Mr Kar explained that the cost of climbing the aspirational ladder has also increased. "Wanna buy a house? EMIs are up. Home prices are up. Rent is up. Even rents for 1BHKs in Tier-2 cities are breaking backs," he said. 

Additionally, education is also becoming a big concern now. "Wanna send your kid to a decent school? Congrats. You're now paying more for "activity fees" than you did for your entire MBA," he wrote, adding, "The dream of upward mobility is still there - just hidden behind a paywall."

The investment banker also said that middle-class Indians are being "nudged" to take charge of their own financial future. "Buying their own insurance. Invest their own money. Manage their own retirement. All without tools, education, or support to do it well. There's no safety net. Only a tightrope. One medical emergency = 5 years of savings, gone," he wrote.

Mr Kar also provided a few points that need to happen to fix the issue. "Financial literacy at scale. A policy that doesn't ignore the middle 60%. Less dependence on salaried income and more on assets. And maybe - just maybe - a government that rewards savers, not just spenders," he wrote. 

"The Indian middle class is not lazy. Not entitled. Not unambitious. They're just running on a treadmill that's speeding up while their shoes are wearing out. If we want a stronger India, we need to stop treating them like they're fine. Because they're not," he concluded. 

Also Read | Indian Man Says His US Visa Was Rejected In 40 Seconds After Honest Reply. See Post

Since being shared, Mr Kar's post has resonated with many LinkedIn users. 

Reacting to the post, one user wrote, "The middle class survives mostly on income, and the rich are mostly those in politically "protected" businesses. Even politics is a business - from the lowest to the highest level. After all, bribes don't have a regulator to limit their growth. We should not dance around the issue of pervasive corruption that enriches the non-salaried class." 

"Hard nail.... unfortunately middle class will work harder and break their back to keep up the pace," commented another. 

"Brilliantly assessed and concisely expressed. I hope someone with the power to initiate change reads and does something to change the course of Central & State Government's Rent seeking mindsets. Starts adding real value for the middle class and thinks of catapulting their living standards to a higher level," expressed one user.