Weak Recovery Leaves India’s Middle Class Anxious and Frugal

These are the kind of people who would normally be traveling to Italy, London or the United States to celebrate their holidays there, said Wilson Dass, a store manager at The Collective, a high-end chain selling items like cashmere overcoats and expensive leather bags. Instead, they are coming to his store, in the industrial hub of Gurugram.

Mr. Dass said he has sold many more Hackett jackets and Versace bags this year, especially recently, than in prior years.

Sales are up by more than 30 percent this year compared with 2019, he said, and the big winter shopping season hasn’t even begun.

His customers, a mix of business executives, wealthy wives and India’s “neo-rich,” want to show off their Karl Lagerfeld bags and Michael Kors tracksuits, he said.

“They have all this money,” Mr. Dass said. “They have to spend it somewhere.”

India’s economic statistics may be better at reflecting the ebullience of India’s economy than the damage. In 2015, the country changed how it calculated growth. The new approach, largely seen as more modern and approved by Mr. Modi’s predecessor, depended on numbers reported by the formal sector, like major companies. But it assumed that the country’s vast informal sector, which employs farmhands, day laborers, rickshaw drivers and many millions of others, would grow in tandem with the formal sector.

Defying that assumption, the pandemic disproportionately hurt India’s informal economy, which employs an estimated 90 percent of the country’s work force, though precise figures are elusive, because it is off the books. Since the beginning of the pandemic, at least 10 million Indians have lost stable, well-paying salaried jobs, according to Mr. Vyas.

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