A middle-class meltdown

Economic shift, stagnating real income post Covid weigh on spending on daily items

- VIVEAT SUSAN PINTO

ONCE THE BACKBONE of domestic consumption, India's middle class, which represents 31% of its population, is cutting back sharply on daily and discretionary expenditure. The warning bells were first sounded by Nestle India's chairman and MD Suresh Narayanan, a company best-known for its brand of noodles (Maggi), instant coffee (Nescafe) and chocolates (KitKat) among other products. Narayanan said that the 'middle segment' of consumers, a key category for most fast-moving consumer goods (FMCG) companies, was shrinking, resulting in diminishing fortunes for these firms.

"Earlier when there was pressure on the middle class, it would last for a quarter or so. But now, it has lasted for two to three quarters, which is worrisome," Narayanan said, after the company reported its slowest quarterly growth for the July-September period in eight years.