“AI could become a job killer for the middle class unless…”: warns one of India’s top financial managers

India’s middle class, once the backbone of the country’s economic engine, is facing an alarming crisis. Saurabh Mukherjea, founder of Marcellus Investment Managers, sounded the alarm in a podcast with Bharatvarta, saying: “The middle class is under the pump. This constituency is becoming a victim of automation and technological change.

Mukherjea pointed to a grim reality: falling sales of FMCGs and entry-level cars, stagnant employment in IT services and fewer on-campus internships for engineering graduates.

Automation and artificial intelligence, he warned, are hitting middle-class jobs hard. “This requires serious thought,” Mukherjea said. “AI could become a job killer for the middle class if not used carefully. »

The problem goes beyond technology. According to a report from Marcellus Investment Managers, routine jobs like clerical and supervisory roles are disappearing, replaced by cost-cutting measures like outsourcing and automation. Wipro Chairman Rishad Premji echoed the sentiment, saying, “Some jobs are going to disappear,” highlighting the vulnerability of white-collar positions.

Economic challenges are worsening the crisis. Corporate profits in the second quarter of FY25 saw their biggest decline in two decades, outside of crises like the 2008 crash. Household debt rose to alarming levels, net saving as a percentage of GDP reaching its lowest level in 50 years.

RBI data shows that while gross savings remain stable, rising unsecured loans reduce disposable income, leaving families with little financial cushion.

Consumption patterns reflect the consequences. FMCG giants Nestlé India and Hindustan Unilever have reported a sharp slowdown in urban spending. Suresh Narayanan, chief executive of Nestlé, highlighted the “decline of the middle class” as one of the main drivers of slowing growth in the food and beverage sector. Rohit Jawa, CEO of Hindustan Unilever, noted that “urban growth has tended to decline, particularly in large cities.”

Indian political and economic leaders are under increasing pressure to resolve this crisis. Mukherjea warned that the middle class is being neglected, overshadowed by the electoral focus on the most disadvantaged. “The middle class is becoming an orphan child,” he said, advocating mission mode strategies to prevent AI and economic trends from further devastating this critical demographic.