after the shock of Covid-19, the sinking of the Indian middle class

Par Ravi Pinto

Posted today at 09:59

The queue extends to the sidewalk. Still, clients of Muthoot Finance, one of the largest pawn shops in India, would prefer to keep a low profile. Their discomfort is palpable, their heads bowed and their eyes shifty. They are traders, owners of a small business or even employees. As a last resort, they came to deposit gold jewelry here to borrow some money.

Since the start of the Covid-19 pandemic, more than thirty people have crossed the threshold of this tiny agency on a daily basis, located in Lajpat Nagar, a popular district in southern New Delhi. This is twice as much as before. But no one wants to express themselves as the shock of the downgrading is so violent for these Indians who had lived relatively well until then. Not long ago, Sangeeta Sareen was still the head of a school support center. Today she had to leave her jewelry as collateral for some cash. Under the influence of emotion, she will not be able to finish her story.

The agency door opens, a man in his fifties with a salt and pepper beard comes out. “My financial difficulties started with the first confinement, I lost a lot of customers”, indicates Kuppu Kumara Velu. TV installer on his own account, he has just paid the monthly interest on his loan of 600 euros, obtained against a gold bracelet.

Read also Article reserved for our subscribers Covid-19: the great leap back in the Indian economy

This father has lost more than five hundred clients in the past eighteen months. The TV boxes of his former cable subscribers are now gathering dust, piled up in a hallway of his home, not far from there. Until then, his activity had always enabled him to provide for the needs of his wife and their two daughters, aged 12 and 14. But, in less than two years, Kuppu Kumara Velu’s cash flow has been divided by three, from around 800 euros to 230 euros per month.

The family had never gone through such a difficult time. “Before, I could take my daughters to shop and buy them nice new clothes, regrets Manjula, the wife of Kuppu Kumara Velu. We often ate meat but I had to explain to my children that we had no more money and that we now had to do without. “ The two teenagers also had to give up their passion for baking, because they could not afford the necessary ingredients.

The TV boxes of former Kuppu Kumara Velu cable subscribers piled up in a hallway of his home in New Delhi on November 13, 2021.

Despite their efforts, Kuppu Kumara Velu and his wife had no choice but to go into debt for their survival. In total, they have already borrowed more than 2,000 euros. An amount that allowed them to keep the business afloat but also to make essential purchases. In addition to his gold bracelet, Kuppu Kumara Velu also obtained two other loans against a gold necklace and chain. According to India’s central bank, lenders granted more than $ 64 billion in loans (€ 56.6 billion) against gold jewelry in the first eight months of the year, a jump of 74 billion. % compared to the year 2020 over the same period.

You have 69.35% of this article left to read. The rest is for subscribers only.