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Illustration: Jayachandran/Mint
Illustration: Jayachandran/Mint

India’s growing middle class

India's middle class is possibly finding its political voice at last

There seems to have been a subtle change in the political discourse in recent months. Narendra Modi first spoke about the importance of an aspirational neo middle class. Then Rahul Gandhi warned his party about losing the support of the urban middle class.

Look back for a moment to one of the big debates before the 2009 election. It was about how many poor people there were in India. There is no doubt that India still has too many citizens hovering around a very modest poverty line, so they just cannot be ignored by any political formation. Yet, it seems the middle class will play a more important role in the political narrative in the run-up to the next general election.

The middle class first got its place in the sun after the 1991 reforms, but as a group of consumers rather than voters. That was when the great myth about 300 million middle class Indians was first propagated. Anybody with a watch was considered middle class—or more generally anybody with a small amount of money to spare for discretionary spending.

After a number of failed business plans, companies realized the truth that the number of consumers does not range in the millions. They have been back to the drawing board since then. There are several estimates to work with. Consulting firm McKinsey and Co. estimated that the size of the Indian middle class will cross 250 million only in 2015, or around one-fifth of the Indian population. The 2011 census shows that a quarter of Indian families own a motor vehicle. Consumer surveys suggest that one in every eight Indian families earn between 2 lakh and 10 lakh a year, admittedly a low bar.

The middle class is growing. It is possibly also finding its political voice at last. The numbers do matter, but perhaps what Modi was hinting at is that political strategists will also have to take the way people think into account. A voter with a very modest income will vote differently if he cares more about the quality of schooling his children get rather than the subsidy on his cooking gas.

Rising incomes usually give people space to think about the future. They begin to ask tough questions about governance. Public goods matter more than hand-outs. Is India at such an inflection point? It seems that important voices in the political system think so.

Several companies have, however, tripped on their bloated assumptions about the power of the Indian middle class.

Will our politicians be more perspicacious? Tell us at views@livemint.com

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