Ajit Balakrishnan: Raising the middle-class spectre

I am a card-carrying member of the Indian Middle Class; my father and grandfather were doctors and our family has supplied more than its share of Indian Administrative and Indian Police Service officers - not to mention judges and army, navy and air force officers. That is perhaps why I get filled with wonder when the spectre of the Indian Middle Class is raised in the public discourse from time to time.

Take, for instance, the 2007 prediction by the consulting firm McKinsey that in another decade or two "India's middle class will swell by more than ten times from its current size of 50 million to 583 million people" and that this "bird of gold" - their name for the Indian Middle Class - would drive India's gross domestic product (GDP) growth rate at a blistering 7.3 per cent per annum through 2025 and make India the fifth-largest consumer market in the world.

Unfortunately, a few weeks after this prediction, the stock markets across the globe crashed and the world entered into what we now call the Great Recession of 2007. But that did not stop the McKinsey prediction from being used in a hundred different investment conferences - to urgently build homes, cars, highways and airports that this exploding middle class would demand. While the rest of the world, particularly the Western world, was drowning in this recession, we in India were sanguine - the Indian Middle Class and its spending would see us through.

Four years later, in May 2011, the Indian Middle Class was back in the news, this time supposedly forming the support base for Kisan Baburao Hazare in his indefinite fast aimed at getting his version of the anti-corruption Lok Pal Bill passed. The implied threat was that the Indian Middle Class would rise in revolt unless Mr Hazare's scheme, in which civil servants would be given veto power over elected politicians, was accepted by the government.

The Hazare movement faded away, and with it the Indian Middle Class spectre - until Arvind Kejriwal and team plunged into electoral politics. This time it was not just the traditional middle class consisting of doctors, teachers, lawyers and journalists that was implicated but also - hold your breath - the "new" middle class. The "new" middle class comprised those working in the private sector who had been apparently increasingly troubled by the job insecurity and increased prices for power and other public services that came with the market-oriented system that had become fashionable after economic liberalisation. In short order, the same Indian Middle Class that had clamoured for free markets flooded with products that it could buy is now seen as wanting to go back to the bad old days of subsidies - and if these demands were not met, governments would fall.

Now that the Lok Sabha elections are around the corner, the spectre of the Indian Middle Class is back in the public discourse. No one puts this more eloquently than Pavan K Varma, who wrote in The Times of India recently: "There is an unfamiliar animal sprawled across the war rooms of most political parties ahead of the 2014 polls. It is the Indian middle class … the docile, half-asleep animal is stirring itself. And nobody is really sure of the consequences of ignoring its importance."

I only wish that this would be true - if not for anything else, then at least for the sake of the many members of my extended family who toil in salaried jobs, struggling to keep up with their children's demands that they be sent to expensive foreign universities and ashamed of the prospect, on retirement, of moving from their cosy government/corporate employer-provided homes to some distant unappealing suburb. The euphoria of middle-class spending power had made foreign direct investment swing away by 2009 from job-creating information technology (IT) services and manufacturing towards real estate, thereby bidding up land and, thus, apartment prices to an extent that the middle class can no longer afford to live in the areas that it has been used to living in. That is why it is comforting again to fantasise that if a government sympathetic to the middle class is elected, such unfairness will be corrected.

But then again, I am not so sure.

Jie Chen, a professor at the University of Idaho, has been studying the mystery of why China's enormous middle class has not been particularly vocal about democratic reforms. In his 2013 book, A Middle Class Without Democracy: Economic Growth and the Prospects for Democratisation in China, he points out that this is probably because the contemporary Chinese middle class has close ideational and institutional ties with the state and uses these ties for its social and economic well-being. This makes the middle class act in favour of the current Chinese system and puts it in opposition to democratic changes. He points out that this phenomenon has also been noticed in other countries. Wherever the middle class was the main beneficiary of state-led growth, it supported even authoritarian regimes; he gives the examples of Singapore, Malaysia, Thailand, Indonesia, Taiwan and South Korea. The key theoretical implications of this are, he concludes: "The attitudinal and behavioural orientation of the middle class … in late developing countries is contingent upon its relationship with the incumbent state ... [thus] the middle class' support for democracy in these countries is far from inevitable."

Ajit Balakrishnan is the author of The Wave Rider, A Chronicle of the Information Age
ajitb@rediff.co.in