Rich or poor, there's a caste element in financial recovery after Covid-19

Religion and region have shaped how families are doing, data shows

There is a significant difference in the financial condition of families in India, calculated as of June 2023, a little more than a year after Covid-19 subsided after its third and final major peak in early 2022. Caste is a factor, religion too.

Intermediate-caste and upper-caste families were more likely to have recorded a net improvement in their financial condition as of June 2023, compared to the previous year. That analysis is based on data on the difference between the numbers of families reporting an improvement minus those who feel their financial condition has worsened over the last year. It is based on the Centre for Monitoring Indian Economy’s (CMIE) Consumer Pyramids Household Survey.

The share of families, across castes, reporting better financial conditions over the previous year was 10.72 percentage points higher than those reporting deterioration. The corresponding figure for improvement was 13.78 percentage points for upper-caste families and 20.41 percentage points for intermediate castes. It was 16.25 percentage points for scheduled tribes. The least improvement, at 2.04 percentage points, appeared to be for scheduled caste (SC) families as seen in chart 1 (click image for interactive chart).
 

The share of families reporting better financial conditions was nearly 40 percentage points higher for Jain families compared to those in the same community reporting deterioration. The corresponding all-India figure for major religions was 10.72 percentage points. It was 13.6 percentage points for Christians, 11.01 percentage points for Hindus and 10.01 percentage points for Buddhists. It was 8.6 percentage points among Muslim families and 0.98 percentage points among Sikhs (chart 2).

The data also looked at a rural-urban split. Urban India had been doing better in the time leading up to the pandemic. But a larger share of urban families reported a worsening of financial conditions during the pandemic than rural ones. A greater proportion of urban families recorded improvement beginning the latest two quarters. The pace of improvement is now better than in rural India (chart 3). 
 

The share of urban Indian families who reported better financial conditions as of June 2023 compared to the previous year was around 18.23 percentage points higher than those reporting deterioration. The corresponding figure for rural India was 7.02 percentage points.

CMIE has an overall index of consumer sentiment, of which data on financial conditions given is a part. The overall index is marginally better for rural India. Christians and Muslims have the lowest index value among religious groups. Caste data suggests that consumer sentiment lags most in the scheduled caste community and other backward classes (OBCs).