India: Links for 4th November, 2019

5 links about India’s middle class – whatever that means – for today.

  1. “The then managing editor of Fortune magazine, Marshall Loeb, was obsessed with the counterintuitive story of a fast-growing middle class in a country still synonymous with poverty. For my story, Loeb devised a headline that trumpeted, “India Opens for Business: The world’s largest middle class beckons foreign investors.” The article quoted NCAER data which estimated that the lower middle class, with annual household incomes of $700 to $1400, was responsible for 75% of unit sales of radios and soap and between a third and half of all shampoo and TV sets.”
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    Care to guess when this article – the one that is being spoken about here –  was penned? Read the rest of the article for a slightly pessimistic take on India’s middle class and its growth prospects.
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  2. I may have linked to this earlier, and apologies if I have, but a compendium of articles on India’s middle class is incomplete without linking to this magnificent – truly magnificent – article from Stanley Pignal in the Economist about India’s middle class.
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  3. Amitabh Kant et al provide for a rebuttal in the Livemint to the article I mentioned above. Given that it is almost two years since both articles were written, give or take, I leave it to you to judge which one has held up better over time.
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  4. Speaking of holding up over time, this is a McKinsey report from 2007 (yes, you read that right), about India’s big spenders – the soon to arrive middle class.
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    “The middle class currently numbers some 50 million people, but by 2025 will have expanded dramatically to 583 million people—some 41 percent of the population. These households will see their incomes balloon to 51.5 trillion rupees ($1.1 billion)—11 times the level of today and 58 percent of total Indian income.”
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  5. And finally, Vivek Kaul on a related note – the income-tax-paying Indian.
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    “In this regard, the Economic Survey of 2015-16 pointed out: “If the state’s role is predominantly redistribution, the middle class will seek—in professor Albert Hirschman’s famous terminology—to exit from the state. They will avoid or minimize paying taxes; they will cocoon themselves in gated communities; they will use diesel generators to obtain power; they will go to private hospitals and send their children to private education institutions.””

Author: Ashish

Prof at Gokhale Institute, Pune, Blogger at econforeverybody.com, Podcaster at anchor.fm/backtocollege

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