Middle class has eroded: Startup founder flags growing financial stress in India
Akshat Shrivastava, a startup founder and financial educator, has sparked a significant conversation regarding the financial decline of India's middle class. Through a detailed post on LinkedIn, Shrivastava reflected on the financial stability experienced by families in the 1990s compared to the financial anxieties faced by today's working professionals. "When I was growing up, my parents in their mid-30s were able to buy a patch of land, build their own house. All on modest income," he noted.advertisementShrivastava described a past era where families, despite modest earnings, enjoyed a sense of financial security. "We never ate at a 5-star restaurant or imagined studying abroad," he recalled, adding that conversations at home focused on everyday topics rather than financial worries. "Dinner conversations were never about money, finance, debt or spending. They were about food, politics, school life, and general chit-chat."In contrast, Shrivastava argues that the current financial landscape is vastly different for many middle-class families. "People are deeply stressed about finances," he stated, highlighting a mere 0.4% compound annual growth rate (CAGR) in salaries over the past decade for those earning between 5 lakh to 1 crore annually. This stagnation, coupled with increasing living costs, has left many disillusioned.
Shrivastava, founder of Wisdom Hatch, pointed out that the pressures of stagnant wages and high costs are pushing people towards riskier financial behaviours. "There's a reason why people are aggressively turning towards FnO, Dream11 and astrology. Not because they want quick money, but because they're stressed—and they gotta take chances," he explained.advertisementThis financial strain, according to Shrivastava, has profound implications on the perceived security of the middle class, which traditionally prioritised home ownership. "If after working 30 years in an okay job, you can't own an okay home, you know that things are NOT okay," he observed, emphasising the disconnect between long-held aspirations and current realities.Shrivastava's post has resonated widely, reflecting the sentiments of many urban professionals who feel that despite adhering to societal norms and working diligently, the promise of middle-class security is slipping away. This sentiment is underscored by the fall in household savings, which have dropped significantly, reflecting the financial stress at a macro level.The erosion of financial stability, as Shrivastava highlighted, indicates a shift in the middle class's ability to maintain its traditional lifestyle without resorting to financial risks or compromises. This shift calls for a re-evaluation of financial strategies to ensure long-term security and stability.
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