'Salaries flat at ₹10.5 lakh': Saurabh Mukherjea warns India's middle class is losing financial ground

India’s middle class is slowly losing economic momentum—and not because of a single crisis, but a combination of long-running structural shifts.

Saurabh Mukherjea, Founder and Chief Investment Officer at Marcellus Investment Managers, breaks it down into three specific concerns: stagnant incomes, job losses to automation, and a looming cyclical slowdown. Together, he warns, these forces are eroding financial security for the middle class and reshaping their future in unsettling ways.

“There are three major ways in which the middle class is becoming economically unmoved,” Mukherjea said in a podcast.

The first, he explains, is stagnant earnings. “As per the income tax data, middle class earnings have stagnated at around 10 and a half lakhs per year for the last 10 years.” In real terms, he adds, “middle class incomes have halved in the last 10 years. Massive issue… you can imagine what it does. People want to live a better life, but in inflation-adjusted terms, that means the middle class has had to load up on a lot of debt.”

The second concern is the growing impact of automation. “Whether it's in factories or in offices, the machines are taking over conventional middle class jobs,” Mukherjea says. “The simplest example being a teller in a bank… first layer of automation was the ATM, second layer will be a bot gradually replacing the teller.” He adds that the next wave—driven by generative AI—will be even more disruptive, both in manufacturing and white-collar sectors.

The third issue, he points out, is cyclical. “India, two years post-COVID, had a terrific economic boom. Revenge spending dies away… it’s leading to a cyclical economic downturn. And it is all but certain that the middle class will be the biggest casualty of this post-COVID cyclical economic downturn.”

Mukherjea says that while the downturn may be temporary, the other two problems—rising debt amid flat wages, and job erosion due to automation—are structural, and “will have a massive… detrimental influence on the middle class over the next decade.”