India's “middle class” lives barely above poverty line and below international poverty standards, a recent report by Research Unit forPolitical Economy, indicates. A large number of people who are considered as non-poor, are people living just above the poverty line. To put it simply, the report underlines that while there is no clear definition of middle class in relative terms, even by income, India's middle class continues to remain poor.
R Srinivasan, Associate Professor, Department of Econometrics, Madras University, opined that comparing India's middle-class with that in western countries was meaningless as India didn't have an income distribution data. “Only three per cent of India's population (around 24 million) are Income Tax Assessees. That means that a whopping 97 per cent of population will have annual income less than two lakh rupees. Even if you consider the lowest pay of a government servant, which is around Rs 20,000, you would realise that they fall under the 3 per cent of the population who are liable to pay income tax,” he explained, indicating that the income of only the ones who pay taxes is available for perusal by government organisations to undertake comparisons. “National Sample Survey (in 2004-05) suggested that in one in four people in India are below poverty line. This means that roughly 25 per cent of India's working populace earns less that Rs 12,000,” he said, adding that 72 per cent of working Indians were in the 'middle income' group, and no data regarding their actual income was available with the government.
A global wealth report by Credit Suisse in October this year, indicated that there were 24 million middle-class adults living in India.
World Socialism Party (India)