India. Craig Jeffrey
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has referred to as a ‘capacity to aspire’. Another of Krishna’s surveys, of the career achievements of village people, canvassed in 105 villages, showed that the highest positions that had been achieved were usually only those of village schoolteacher, jawan (ordinary soldier), or police constable, and that very few people indeed could think of achieving any position beyond these.
The relative lack of socio-economic mobility in India is reflected in what The Economist (2018b) has referred to as ‘the missing middle class’. As the journal says, there have been, and there remain, great expectations on the parts of many large international companies about the potential of the Indian market – supposedly there are 300 to 400 million Indians who are now joining the global middle class. But there is mounting evidence that the market in India for the sorts of products and services that are associated with the global middle class – drinking coffee in Starbucks, for instance – is actually quite limited. It is reported that in India Starbucks has opened about one new shop a month over two years, while new Starbucks outlets have opened in China every 15 hours. Though this observation makes for good journalism, it may not be a good indicator because it is probable that consumer tastes over much of India, not just income, limit the demand for Starbucks’ products. And what defines the middle class? This is always, and everywhere, a difficult question. India’s National Council of Applied Economic Research (NCAER) has proposed a cut-off of Rs 250,000 annual income, which is about $10 a day, at market rates. Calculations by Chancel and Piketty (2017) lead to the conclusion that only 78 million Indians (6 per cent or so) had that sort of income, and for many of them the price of the latest iPhone, costing $1,400 in India at the time of which The Economist was writing, would have accounted for around 40 per cent of their annual income.
The definition of ‘middle class’ in these calculations seems unduly restrictive, however. Data from a Consumer Economy survey conducted in 2016, for instance, suggest that by that time 11 per cent of Indian households owned a car, and that 36 per cent owned a two-wheeler (Bhattacharya 2016). A study of the middle class by the sociologist Aslany (2019) aims to take account of the different conceptualizations of the middle class by Marx, Weber and Bourdieu, and develops a composite index taking account not only of income and possession of consumer goods, but also of skills and credentials, housing, and social networks. Drawing on data from the Indian Human Development Survey of 2011–12, Aslany reaches the conclusion that around 28 per cent of the population can be considered middle class, though rather more than half of them are ‘lower middle class’, and would not be described as middle class according to the reasoning of The Economist.
Debate about the definition and size of the Indian middle class will go on. India has, without doubt, a very large market for consumer goods – expected, for example, until the sharp downturn in demand for all motor vehicles in 2019, to become the third largest market in the world for automobiles. And how much the middle-class market will grow – as so many of the big corporates have expected it will – is influenced, negatively, by the way in which the top 1 per cent of earners in India, those who were making more than $20,000 per annum, have been squeezing the rest. The top 1 per cent earn 22 per cent of all income, according to Chancel and Piketty’s calculations (compared with 14 per cent in China) – and they are succeeding in capturing an increasing share of all national growth. Given this, and the failure of the economy to generate productive employment, the vast majority of Indians will still struggle to make it into the ranks of Aslany’s ‘lower middle class’.
3.5 Conclusion
We have argued that economic growth is not of value for its own sake, but only in so far as it improves the well-being of the people, and their chances of leading lives that they have reason to value; and we have addressed the question of how far India’s historically high rates of economic growth have been successful in making it possible for Indians to realize these objectives. Our conclusion is that the country has been much less successful in translating economic growth into ‘development’ than was hoped for by the policy makers who laid out the objective of achieving ‘inclusive growth’. Though material poverty – deprivation in regard to the most basic necessities of a decent life – has been reduced, in the aggregate, according to conventional measures, and increasingly so as India’s rate of economic growth has increased, it remains the case that a majority of Indians are still vulnerable to falling into poverty. Moreover, a study by S. Subramanian (2019) of data from a survey of consumer expenditure in 2017–18 – the results of which the government had sought to withhold from the public – suggests that income poverty nationally had increased again after 2011–12. Public provisioning of health care, which is the most important protection that poor people have against falling into poverty, is poor, and it compares very unfavourably with neighbouring countries. Direct indicators of well-being, such as the infant mortality rate and measures of nutrition among children, show that India is doing much less well than it should be in relation to the level of GDP per capita.
It also remains the case that the burden of poverty is borne disproportionately by those in the social groups that have historically been most discriminated against – Dalits, adivasis and, increasingly, Muslims – who are subjected to oppression (akin to racism) as well as to exploitation. The rate at which economic growth reduces material poverty has been less than in comparator countries – and notably less than in China – and it has been held back by increasing inequality. Social and economic mobility is very restricted, opportunities are very limited for the great majority of Indians, and one of the reflections of this is that the middle class is less numerous than has been supposed. Why hasn’t India done much better than this? This is the question we take up in the next chapter.
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