India Supercharged Its Economy 30 Years Ago. Covid Unraveled It in Months

More than 200 million have gone back to earning less than minimum wage, or $5, a day, the Bangalore-based Azim Premji University calculates.

Thirty years ago, on a summer evening in late July, India liberalized its Soviet-style economy in a transformation that eventually pulled about 300 million out of poverty, fueling one of the biggest wealth creations in history. Then came the world's fastest coronavirus surge which left overflowing hospitals turning away the dying and crematorium smoke darkening city skies. Years, and perhaps decades, of progress have been unwound in months, as many Indians who had clawed their way out of poverty face grim job prospects and carry heavy debt loads wracked up to get themselves and loved ones through the pandemic. The devastation has highlighted just how much poor health care and infrastructure -- often neglected in the boom after liberalization -- are holding back the nation and its people. More than 200 million have gone back to earning less than minimum wage, or $5, a day, the Bangalore-based Azim Premji University calculates. The middle class, the engine of the consumer economy, shrank by 32 million in 2020, according to the Pew Research Institute. That means India will be regressing on vital fronts just as its global importance is growing.