India’s middle class crisis: Stagnant salaries, rising debt & the AI takeover

Despite working harder than ever, India’s middle class is facing an alarming reality: they are getting poorer. According to Saurabh Mukherjea, top investor and Founder of Marcellus Investment Managers, the middle class is stuck in an economic trap where incomes are stagnant, but expenses are skyrocketing.

For years, the middle class has been the backbone of India's economy, driving consumption and growth. However, their average salary has remained stuck at around ₹10.5 lakh, failing to keep pace with rising inflation, education costs, healthcare expenses, and housing prices. At the same time, debt levels are climbing, putting further strain on households.

One of the biggest threats to middle-class prosperity is automation. Mukherjea highlights that machines have already replaced traditional roles—ATMs took over bank tellers, and now AI is rapidly encroaching on white-collar jobs. Software programs and AI-driven solutions are automating tasks once performed by accountants, analysts, and even legal professionals. This shift is not just temporary; it marks a deep structural change that will impact the middle class for decades.

As automation advances, the demand for human workers in many sectors is shrinking, leading to job insecurity and stagnant wages. Meanwhile, wealth creation is increasingly concentrated at the top, widening the gap between the rich and the middle class.

The challenge ahead is clear: India needs policies that foster skill development, encourage entrepreneurship, and create new job opportunities in emerging industries. Without proactive measures, the middle class may continue to struggle, despite their hard work. The time to act is now—before this economic shift turns into a full-blown crisis.