Artificial intelligence (AI) is poised to significantly disrupt middle-class jobs, warns Saurabh Mukherjea, founder of Marcellus Investment Managers, during a conversation on the Bharatvaarta podcast. Mukherjea emphasised that India, like the West, is witnessing the rise of automation in factories and offices, which disproportionately impacts middle-income roles.

 "Because the middle class clearly is under the pump, and they seem to be the casualties of the automation of the workplace," Mukherjea noted.

AI and automation are leading to disruptive changes in Indian workplaces, with emerging technologies benefiting low- and high-skilled workers while leaving those in middling roles vulnerable. A report by Marcellus Investment Managers suggests that the middle class is experiencing job displacement due to these advancements. A recent survey of India's manufacturing sector by the Annual Survey of Industries also highlighted a decline in the number of supervisors employed, indicating that traditional managerial roles are becoming obsolete.

"The increasing trend of contractualization and outsourcing by producers implies that many managerial and supervisory roles no longer exist. While workers are needed to produce and operate machinery, supervisors are no longer required for them," said PC Mohanan, former acting chairman of the National Statistical Commission, the Business Standard had reported.

Similar concerns were echoed by Rishad Premji, Chairman of Wipro, who stated, "The reality is, there are going to be some jobs that will disappear."

Several industry leaders have recently raised alarms about the declining middle class in India. This 'hollowing out' is evident in shifting income levels and changing consumption patterns, with traditional middle-class segments showing reduced spending power.

 Nestle India's Managing Director, Suresh Narayanan, also noted shrinking middle-class consumption, remarking, "There used to be a middle segment most FMCG companies operated in. That seems to be shrinking."

Globally, the World Economic Forum's Future of Jobs Report (2023) projects that 25% of clerical roles worldwide could be automated by 2028. Mukherjea emphasised that India's middle class, already struggling with stagnant job creation in IT services and declining FMCG sales, is particularly at risk.

The Positives

Despite the challenges posed by AI and automation, Mukherjea highlighted opportunities created by innovation. He observed a shift toward startups and the gig economy among young Indians due to limited white-collar jobs. "Post-2021, profitability among 6,000 mid-sized companies has surged, outpacing large incumbents," he said, pointing to India's increasingly competitive and decentralised economy.

Reflecting this shift, recent data reveals that over 15% of India's high-net-worth individuals (HNIs) are under 30, while 20% of the nation's millionaires are below 40. These trends suggest that while automation may displace traditional jobs, it is also opening new avenues for entrepreneurial and technological growth.