No. 58, Sept. 2014

No. 58
(Sept. 2014):

A Middle-Class India?
Introduction

I. Behind the Sudden Interest in India’s Middle Class

II. The Problem of Defining the Middle Class

III. The Reality: Gaping Inequality

IV. The Reality: A Deformed Structure of Employment

V. India’s Middle Class

VI. Conclusion

Appendix: Putting ‘Middle Class’ Consumption in Perspective: Some Figures

 

 

 A Middle-Class India?

Appendix: Putting ‘Middle Class’ Consumption in Perspective: Some Figures

As mentioned in Chapter V, there has been some growth in the absolute numbers of the middle class, though not in the proportion they constitute of the whole population. What have risen fast are the incomes of a section of the middle class. The national and international media point to the growth of certain consumption indicators, including some socially undesirable and wasteful forms of consumption, as evidence of the growth of India’s middle class. But when placed against the numbers of the whole population, it can be seen that this phenomenon is very restricted. In the long term, there are structural constraints on its growth.

Consumption growth...

...in perspective

Existing housing loan accounts of commercial banks rose from 0.3 million in March 2001 to 4.2 million by March 2011; the value outstanding rose more than 20-fold.i

However, such housing loans in 2011 constituted 5 per cent of total urban households.ii

India manufactured about 0.2 million passenger cars in 1991, and about 3 million today.iii The percentage of households owning motor cars/jeeps rose between 1993-94 and 2011-12 nearly 7-fold in the urban areas and 10-fold in the rural areas.iv

Still only 8% of urban households and 2% of rural households own cars or jeeps.v Car ownership nationwide (urban + rural) is 13 per 1000 persons, compared to the USA (439), Japan (617), Germany (510), Mexico (191), Brazil (165), and South Africa (110).vi

The number of trips made by domestic air passengers doubled from 7.5 million in 1990-91 to 15.7 million in 2003-04; it then more than tripled to 53.9 million in 2010-11.vii

The ratio of domestic air trips to population is just 0.04.viii

India is the 2nd largest source of outward-bound college students (after China).ix The flow was nearly 190,000 in 2012 (97,000 to US, 30,000 U.K., 12,000 Australia, 8,000 Canada). At end-2013, public sector banks had 2.57 mn. student loan accounts (Rs 57,700 crore outstanding).x

India’s outward-bound students amount to 0.1% of Indians in the 18-23 age group. The number of student loan accounts was less than 2% of those in that age group, and was less than 12% of the number of college students in India.xi

Indians spent less than $0.5 billion on foreign travel in 1993-94; this rose to $11.8 billion by 2012-13.xii

The number of Indians who traveled abroad in 2010 was just 1% of the population.xiii

 

 

BACK TO Table of Contents

 

Notes:

i. Charan Singh, “Housing market in India: A comparison with the US and Spain”, http://www.iimb.ernet.in/research/working-papers/housing-market-india-comparison-us-and-spain (back)

ii. Charan Singh, op.cit. (back)

iii. Akshima T. Ghate, S. Sundar, “Can We Reduce the Rate of Growth of Car Ownership?,” EPW, 8/6/13. (back)

iv. National Sample Survey Office (NSSO), “Household Consumption of Various Goods and Services in India, 2011-12”, 68th Round. (back)

v. NSSO, op cit. (back)

vi. http://mospi.nic.in/Mospi_New/upload/SYB2014/CH-20-MOTOR%20VEHICLES/MOTOR%20VEHICLE-WRITEUP.pdf . The figure for India is for the year 2011; for Brazil, 2008; and for the remaining countries 2009. (back)

vii. National Transport Development Policy Committee (NTDPC), Report of Working Group on Civil Aviation, Ministry of Civil Aviation, June 2012. (back)

viii. NTDPC, op cit. (back)

ix. UNESCO Institute for Statistics, “Global Flow of Tertiary-Level Students”, http://www.uis.unesco.org/Education/Pages/international-student-flow-viz.aspx (back)

x. Business Standard, 18/2/14, http://www.business-standard.com/article/economy-policy/partial-write-off-on-education-loans-900-000-students-to-benefit-114021700968_1.html. (back)

xi. Figures for population in the 18-23 age group and number of college students in India from Twelfth Five-Year Plan, vol. III, p. 96. (back)

xii. Reserve Bank of India, Handbook of Statistics on the Indian Economy, Table 144. (back)

xiii. Times of India, 12/2/13, http://timesofindia.indiatimes.com/india/Indians-flying-abroad-may-rise-six-fold-in-20-years-Study/articleshow/18456767.cms (back)

 


 

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