The Middle Class Is Disappearing - Saurabh Mukherjea

India is heading toward two classes, Saurabh said. An elite of industrialists and their C-suite. A mass working class that becomes the government’s vote bank. The middle class will be completely hollowed out.

The Founder of Marcellus Investment Managers had just walked through the 10-year data showing the middle class income freeze. The natural follow-up question was where this ends. His answer was not comfortable to hear.

The Confirmation Of The Trend

The interviewer summarized what had come before.

Middle class is getting poorer, the interviewer said. It shows in the data. Even at inflation parity, their income is not growing. So will they also fall into the poor class?

Saurabh confirmed the direction.

Many who are on the border line will, he said. This is what has happened in the last 10 years. But if you extend this 10 or 20 years further, the picture becomes different.

The extrapolation is where the analysis gets serious.

The Agentic AI Escalation

Saurabh distinguished between where AI is now and where it is going.

Remember, agentic AI has not fully arrived yet, he said. Until now we have been using augmented AI, where AI helps humans do their existing work. Agentic AI is starting to work well now. When agentic AI comes and starts eating jobs, this hit will get much worse.

The distinction matters. Augmented AI makes existing workers more productive. Agentic AI replaces workers by completing entire tasks autonomously.

Saurabh added that he is already seeing the effect in his own market.

Actually agentic AI is already eating jobs, he said. I am in the jobs market. All kinds of AI agents are being built. We are using them ourselves.

The Consulting Example

He gave a specific case.

Look at consulting jobs, Saurabh said. Earlier, they needed presentation makers. Today, they don’t. That used to be a decent-salary job.

The presentation maker in a consulting firm was a mid-level analyst whose primary output was polished slide decks. This role employed thousands of people. It paid well. Agentic AI has quietly displaced it.

The pattern is worth understanding. Not every job goes away. The specific tasks that were monetized as jobs get absorbed by AI. The compensation and identity that came with those tasks disappears with them.

The Chandra Revelation

Saurabh then cited a specific public statement.

Ten days back, Saurabh said, Natarajan Chandrasekaran, the Chairman of Tata Sons, said that three years from now, TCS will have more agents than humans.

This is the kind of statement that would have been unimaginable five years ago. TCS is India’s largest IT services company. Its Chairman is not a startup founder speculating about the future. He is the leader of the company most responsible for India’s IT services identity.

When he said it, Saurabh said, being not a techie myself, I did not understand how he could say this so confidently. But the way you techies are describing what is happening, I now understand. The need for humans will slowly decrease.

The Two-Class Future

Saurabh then laid out the systemic projection.

If this continues, he said, an elite will exist. The industrialist. His CEO. His C-suite people running the company. That elite will run the company using AI. Below them, a mass working class will exist. That mass will be the government’s vote bank. The government will give them various benefits and schemes to sustain their lives. The middle class - that entire tier - will be completely hollowed out.

The two-class picture is the endpoint of the trend line Saurabh has been describing. The middle class does not just shrink. It disappears as a coherent economic category.

The 2002 American Prediction

Saurabh added an important historical note.

This picture is visible across the world, he said. And it was first predicted by three American economists in 2002. They said 24 years ago that the middle class will be stretched thin. In US, in Sweden, in India. Because the elite will exist as industrialists and the masses will exist as voters. Between them, there will be no one, because there will be no need.

The Autor-Levy-Murnane paper on “The Skill Content of Recent Technological Change” was published around this time. It predicted that computerization would hollow out middle-skill jobs while preserving both high-skill and low-skill work. The current AI transition is accelerating what those economists forecast.

The Snakes And Ladders Metaphor

Saurabh then offered the metaphor that captures the survival math.

The middle class person will either break out through something entrepreneurial to reach the industrialist layer, Saurabh said, or they will fall down to the mass class. Snakes and ladders. Either you climb the ladder and hit 100, or the snake pulls you down to one, two, three.

The metaphor is stark but accurate. The stable middle position is disappearing. What replaces it is a binary. You either escape upward or fall downward. There is no equivalent to the slow steady promotion path that used to define middle-class life.

The peaceful middle-class life where my father was a government employee, Saurabh said, my mother was a Maths teacher, and they gave me an education so that I could rise slowly through exams and appraisals and promotions - that entire story is over.

The personal note grounds the abstract projection. Saurabh’s own family story is the template of the Indian middle class of the previous generation.

The Noida Test-Prep Observation

Saurabh then cited the visible evidence.

On my way to your studio, he said, every third shop in Noida was a test prep center. Someone is doing IIT. Someone is doing NEET. Someone is doing CUET. What does this represent? A desperate fight. A ferocious battle. To somehow escape the middle class and reach the top layer.

The test-prep economy is often celebrated as evidence of Indian ambition. Saurabh’s reframing is that it is evidence of desperation. Every family that puts a child through expensive coaching for IIT or NEET is trying to buy a ticket to the top layer.

The Techie Fear

The final observation Saurabh made was specific to his own network.

I know many techies, Saurabh said. I was a techie myself. Rs 1 crore salaries, Rs 50-70 lakh salaries - all of that is in danger today. They are asking me - will AI replace us? What should I learn quickly to get above this? There is a lot of fear.

The Rs 50-70 lakh salary was, until very recently, the top of the Indian middle class. It represented senior technology professionals at global firms and Indian corporates. That group is now openly discussing their vulnerability.

If the Rs 70 lakh senior techie is asking what to learn quickly to survive, the Rs 15 lakh mid-career professional is in even more trouble.

What This Reveals

Three things from this segment will stay with me.

The two-class future is not a Marxist critique. It is a projection from a mainstream investor who reads corporate roadmaps. When the Chairman of Tata Sons says agents will outnumber humans in three years, the two-class future is a corporate strategy statement, not a political prediction.

The 2002 economist warning has been quietly correct. The middle-class hollowing was predicted 24 years ago. Every technology cycle since then has moved us closer to the predicted endpoint. AI is the acceleration.

The snakes and ladders metaphor is the honest description of the current path. There is no stable middle.

The Universal Insight

The Saurabh projection is not unique to India. The same dynamic is unfolding in every economy where AI is being deployed. The specific numbers differ. The pattern is consistent.

What is unique to India is the speed and the scale. India has 15-20 million tech-adjacent workers whose jobs are directly exposed to AI displacement. India has 80 lakh graduates per year with almost no absorption. India’s middle class has been frozen for 10 years and now faces additional acceleration downward.

The Political Implication

Saurabh does not directly explore the political dimension of his projection, but it is worth acknowledging.

A country whose middle class disappears is politically unstable in specific ways. The middle class in most democracies is the swing group. Its expectations for social mobility are the ballast that holds political systems together. When the middle class no longer expects mobility, the political consensus that assumes their upward path becomes fragile.

The mass working class that Saurabh describes as the government’s vote bank is a specific political-economy configuration. Governments deliver welfare and benefits. In return, the mass class delivers votes. This is a stable arrangement in the short term. It is less stable across decades as the elite’s ability to fund welfare through their own taxation runs into limits.

The Real Question For Readers

The uncomfortable question the segment raises is whether you are on the ladder or waiting for the snake.

Every reader in the middle class is now in the game. The ones who become genuinely irreplaceable - through ownership, extraordinary specialization, entrepreneurship, or genuine relationship networks - will climb. The ones who assume the slow-steady promotion path still exists will not.

The framework does not prescribe a specific escape. But it names the reality that used to be denied. The middle class is not just being squeezed. It is being architected out of the economic future.

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