Wednesday, November 15, 2017

An Indian Middle Class?

Depending on how you calculate it, economists estimate between 10 and 30% of Indians are 'middle class'. A 2012 federal government exercise that counted citizens paying income tax - 29 million - as 'middle class'.

Economists Sandhya Krishnan and Neeraj Hatekar conclude that 600 million people, or more than half of India's population, belong to the middle class.

The economists have used an income threshold that defines middle class people as those living on between $2 (£1.52) to $10 per person per day, valued at 1993 purchasing power parity (PPP) dollars. (Purchasing power parity enables you to compare how much you can buy for your money in different countries.) They have broken down the middle class into two - the lower middle (living on $2-$4 per person per day) and upper middle (living on $6-10 per person per day).
They argue that the lower middle class has fuelled the increase in numbers. A large number of them are engaged in jobs like farming and construction that the poor have traditionally done. Now they make up, according to the study, more than two-thirds of the middle class.
"The composition and character of the new Indian middle class is indeed unique because it now has people who are typically not considered to be belonging to the middle class," Ms Krishnan and Dr Hatekar explained. "These include the informal sector workers such as construction workers and people from the disadvantaged caste groups. Most importantly, we need to understand that the conventional idea of the middle class- of the educated, upper-caste groups - does not hold true anymore." 
It is also true, they agree, the new middle class is vulnerable to falling back into poverty in the event of an economic shock. The ongoing economic slowdown may have already hurt many of them, as jobs are lost and wages shrink in sectors like construction.
Anirudh Krishna, a professor of public policy and political science at US's Duke University, believes the latest findings show a considerable expansion of the middle class only because it has included a vast number of the near-poor and still-vulnerable people. He reckons that if you calculate India's middle class by setting its lower threshold at $10 per person a day, then less than 2% of Indians actually have the status. But if you set the lower income threshold at $2 per person per day, then the middle class count would swell to include maids and drivers, security guards and construction workers, indeed almost anyone who is gainfully employed.
Dr Krishna says "freedom from vulnerability and a real chance of upward mobility" are what truly define the middle-class existence. "That's why people who are not in it aspire to be in the middle class. There's an aspirational element to middle-class; it's not simply a mathematical construct and a sociological cipher. It's not clear that many aspire to be maids or construction labours - or whether these people regard their own existence as a middle class one," he pointed out.
The aspirational element is what a second new paper by Devesh Kapoor, Neelanjan Sircar and Milan Vaishnav sets out to explore. They asked nearly 70,000 Indians, living in cities and villages, whether or not they would describe themselves as middle class. The authors chose something as subjective as self-identification as a way of measuring middle class given the "inconclusive debate over the use and abuse of objective measures of class belonging".
The study found that almost half of the respondents - between 40 and 60% - across two dozen states and across all ages and all income and social groups, identified themselves as middle class. To be true, most Indians in cities and towns called themselves middle class compared to people living in villages, where nearly 70% of Indians live. But even 45% of low income respondents identified themselves as middle class - just 3% less than the richest income group.
The World Socialist Party (India) makes a less complicated, convoluted analysis. It says there are two classes in society, a claim based upon simple facts about the society we live in today.