Dear MEL Topic Readers,
Educated and employed but still struggling: India's middle class under
strain
Education and the middle class sound like key drivers of economic growth,
but not quite so nowadays in India. Over eight million college students graduate
each year, only a few million shy of China, and nearly 30% of them are
unemployed. Even among the graduates of 23 Indian Institutes of Technology (IITs),
India’s world-famous premier IT and engineering institutions, almost 40% are
unemployed, while uneducated people can find jobs much more easily, even though
the pay is much lower than the national average. Thus, the number of middle-class
workers and families isn’t increasing so much any longer. Also, inflation has
been outpacing income growth, including rent, food, healthcare, and education.
In order to fill the gap between earnings and spending, nearly half of all
Indian families are taking personal loans. But borrowing money creates debts
and an extra burden, the interest, which is higher than the inflation and often
the income growth. Unless income growth outpaces inflation and interest rates,
borrowers fall into a debt trap, taking new loans to pay off old ones. It seems
that AI and inflation are eroding the illusion of creating a middle-class economy
with education.
Read the article and learn about what hampers India’s economic growth.
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