Myth of the great Indian middle class
As political parties get battle-ready for the 2014 general elections, the great Indian middle class is again in the spotlight. Every political party...
As political parties get battle-ready for the 2014 general elections, the great Indian middle class is again in the spotlight. Every political party wants the biggest pie of this vote bank, whose tilt can decide who will form the next government at the Centre. India's middle class will hit 250 million or 20 per cent of the country's population in 2015, according to McKinsey and Company. But, what is the middle class? How has it evolved into such a driving force?
The year 1991 was a landmark in India's economic and political history. And by throwing its doors open to the world, it created two myths: The great Indian middle class and the great Indian growth story. However, the myth was soon busted when the 300-million middle-class figure projected in 1991 actually stood at 30 million.
According to the standards set by the Asian Development Bank, members of the middle class consume on average $2- $20 a day. Is the vulnerable middle class who consumes $2 a day better fitted to be called the middle class? Or the middle middle class who spends $4-$10 a day? Or, the upper-middle class who can afford expenditures of $10-$20 a day? Twenty years hence, the 2011 census shows that only 4.6 per cent of India's population has ownership of all four assets - television, computer/laptop, scooter/car and telephone/ mobile phone. While the limiting asset is the computer with only 9.5 per cent ownership, 21 per cent owns a scooter and 63 per cent owns a phone.
And while roughly 30 per cent of India's population lives below the poverty line, 17.8 per cent owns none of the specified assets in the census chart. Then, which is the rising middle class, and which of these middle classes do Rahul Gandhi and Narendra Modi refer to in their promises of the future?
While there is the so-called affluent belt from Himachal Pradesh through Punjab, Haryana and UP in the north, and a chunk of Kerala, Tamil Nadu and Andhra Pradesh in the south, in Chandigarh, the most affluent state in terms of ownership, this is true of only 28.6 per cent of households. In contrast, a poverty belt starts from the tribal belt of North-West India, which includes the Central India Tribal Belt, parts of Bihar, Orissa and the North-East. Moreover, inequality is rising both between and within affluent and poor States, for instance, in Maharashtra and Bihar.
The great Indian growth story is not trickling down. So, are we the 4.6 per cent, the 17.8 per cent, the 21 per cent, or the 63 per cent? Are you the middle class that the political class is trying to woo?