Middle-income households, particularly at the upper levels within this bracket, suffered much more because they had a lot more to lose.
The loss of incomes during the lockdown was felt across the household income spectrum, however, the worst-hit were the middle-class and the upper middle-class people. Middle-income households, particularly at the upper levels within this bracket, suffered much more because they had a lot more to lose, said the Centre for Monitoring Indian Economy (CMIE). They lost their income in excess of 30 percentage points. The proportion of people that said their incomes were higher than a year ago, fell from 9.6 per cent in April, to 6.1 per cent in May, and further to 4.4 per cent in June. The recovery in jobs did not significantly contribute in improving the incomes.
In April-June 2019, more than half of the households that earned more than Rs 5 lakh per annum reported an on-year increase in household income, however in the same period this year, less than 15 per cent of such households reported a similar increase. As incomes rose above Rs 10 lakh per annum, the proportion of households reporting an increase in income dropped dramatically. It fell to single-digit beyond Rs 15 lakh per annum and then to zero for incomes between Rs 18 lakh and Rs 20 lakh a year, while in the year-ago period more than 60 per cent of the households that earned more than Rs 10 lakh per annum reported an increase in income.
However, the condition reversed in the case of people earning more than Rs 24 lakh per annum. One-third of the households that earned between Rs 24 lakh and Rs 36 lakh and half of the households that earned more than Rs 36 lakh per annum reported an increase in income during April-June 2020. As the income of a household rises, the probability of its income continuing to rise also rises, the report said. Meanwhile, on an average across all the income groups, 33 per cent of the households had reported an increase in income in the April-June 2019 quarter, which fell to a mere 6.7 per cent in the current year.