The categorisation of middle class in India is too broad for meaningful analysis
With apologies to an amiable and erudite Prime Minister, I sometimes wonder if economists shouldn’t be bracketed with witch-doctors, numerologists and practitioners of other dubious trades. Indeed, I can understand a sceptical Singaporean’s comment that Indians do so well in global finance because astrology is in our blood.
It’s not just the fatuous Rs 32-a-day controversy I have in mind, though the figures tossed about and the arguments advanced to support facile definitions of poverty expose the limits of punditry and the ivory tower in which many economists luxuriate. I am thinking of the Asian Development Bank’s (ADB’s) glowing report on “the Rise of Asia’s Middle Class”. It predicts that “India’s booming middle class … spurring consumption and innovation” at home will take over from its European and American counterparts as the engine of global growth.
But who are these Indian movers and shakers who hold the future of the world in their wallets? I have always been baffled by both the numbers that are bandied about and how they are arrived at.
We have been hearing of a 300 million-strong middle class for more than 20 years. In 1993, a Singaporean minister, George Yeo, cut it down to 200 million Indians who were “modestly middle class by world standards but impressively comfortable by Indian standards”. I asked Yeo for the basis of the figure and he said he had it from his Indian hosts. What was their source? Then I remembered Mani Shankar Aiyar claiming that the 300-million figure popped out of his head when a Western reporter popped the question. He trotted it out again during last November’s Doha Debate, aggressively telling the British moderator, Tim Sebastian, “That’s approximately five times the size of the population of your country.”
But does India really have this broad group between the working class and upper class that can be called middle class in Weberian socio-economic terms? Don’t the complexities of caste, community, education, lifestyle and perception mean overlapping at both ends and rule out simplistic categorisation? As a child we had a cook called Manmohan Jha from Darbhanga who would have walked out of the house if my mother walked into the kitchen. During the Mithila agitation many years later a Bihar dignitary revived that memory by saying, “Maithilis talk of their glorious past but what were they except cooks in Bengali households?”
Where does the ADB’s decision on the basis of purchasing power parity that 274 million Indians are middle class because they earn between Rs 1,035 and Rs 10,354 place our part-time maid? By sweeping, swabbing and dusting all day in three houses she earns a monthly Rs 3,000. But this illiterate woman gets up at crack of dawn to walk for 20 minutes from her hut in a village without electricity to the nearest railway station to squeeze into a packed suburban train for the 45-minute ride to Kolkata. She has never heard the term middle class but would be astounded to hear herself described as bhadralok, literally gentlefolk, the nearest equivalent.
Nancy Birdsall, president of the Centre for Global Development, possibly comes nearer reality by defining the middle class as traditionally those who enjoy the economic security that allows them to uphold the rule of law, invest their savings and demand social and political stability. Unlike the rich, they don’t depend on inheritances or other non-productive sources of income.
But Birdsall, too, falters when it comes to figures. Her yardstick of a minimum earning of the equivalent of $10 per day per person but excluding the top five per cent just doesn’t work because everyone who earns that much is in India’s top five per cent. But let’s not start gloating that on the basis of Birdsall’s calculations, even Business Standard columnists are among the country’s rich. Other surveys tell us that even the rich here lack many of the basic amenities that lower middle and even working class people take for granted in developed countries. The economist Lant Pritchett shows that under 25 per cent of India’s richest quintile completes the ninth class at school.
But a plague on economists does not mean a plague on economic newspapers. When a leading Delhi economist was dashing off to Patna for an economic conference in those balmy days when Rabri Devi was chief minister, I couldn’t stop myself blurting out, “But Bihar doesn’t have an economy!” The man replied grumpily that it wasn’t necessary. “Bihar has economists!”
India is the land of benign contradictions. Long may it remain so.
In spite of the RBI's rate cut and the Centre's reforms, any recovery will only be half-hearted