Pandemic relapse spells trouble for India's middle class

NEW DELHI (AP) — Ram Babu moved from his village to the Indian capital New Delhi in 1980, to clean cars. Soon, he learned to drive and got a job as a tour bus driver. Decades later, he set up his own company, Madhubani Tours and Travels.

In March 2020, a stringent nationwide lockdown to fight the coronavirus pandemic froze economic activity overnight. Babu's business collapsed, and he drove his family back to their village.

“Since March last year, we haven’t earned a single rupee,” he said. “All of my three buses are standing still for more than a year. We are completely broken.”

India’s economy was on the cusp of recovery from the first pandemic shock when a new wave of infections swept the country, infecting millions, killing hundreds of thousands and forcing many people to stay home. Cases are now tapering off, but prospects for many Indians are drastically worse as salaried jobs vanish, incomes shrink and inequality is rising.

Decades of progress in alleviating poverty are imperiled, experts say, and getting growth back on track hinges on the fate of the country’s sprawling middle class. It’s a powerful and diverse group ranging from salaried employees to small business owners like Babu: many millions of people struggling to hold onto their hard-earned gains.

The outbreak of the pandemic triggered the worst downturn since the Great Depression of the 1930s and as it gradually ebbs, many economies are bouncing back. The World Bank foresees 5.6% global growth for 2021, the best since 1973.

India's economy contracted 7.3% in the fiscal year that ended in March, worsening from a slump that slashed growth to 4% from 8% in the two years before the pandemic hit. Economists fear there will be no rebound similar to the ones seen in the U.S. and other major economies.

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