How many middle class people do we have?

ved · Telugu Veera Joined: 26 Feb 2006 Posts: 2069

Today, in one of the hard hitting story, Andhra Jyothy editorial writes that there are only 1 crore middle class people in this country. I tend to think it is totally baseless, false and preposterous.

First it points to the classification that families with per capita income of Rs 1098/month as middle class. Then it believes that there are only 4 crore people fall into this category. Second it contends that only 20% of these people should be classified as middle class bringing the total middle class to 1 crore.

Let us look at differently. There are 3 crore employees (roughly 12 crore dependents ) in the country working for public and private companies, including central and state governments, with permanent employment, pension etc. This figure doesn't include farmers, small business employees, shop keepers, contractors, sub contractors, sales clerks, hotel employees and other private employees that are considered unorganized. There are almost that many bread winners in this unorganized sector making as much money. According to 6 th pay commission, the minimum salary for central govt employee is Rs 6000/month or roughly Rs 1500 per capita income, assuming average family size of 4.

So I don't know how AJ came up with 4 crore people with PCI of Rs 1098, when 20+ crore people earn more than that. According to multiple estimates and market research, they estimate that India has at least 200 million middle class. That seems more accurate.

What do you think about AJ article? Where do you put the size of middle class?

Stalinist · Posted: Wed Apr 23, 2008 10:47 am Post subject:

Government is making false reports of poverty and middle class statistics. A wage labor earns Rs 50 per day. If he works every day except sundays, his income would be Rs 1,300 per month. Is he a middle class person? If wage workers are middle class, why do most of them live in huts? According to government, poverty line is Rs 11,000 per year. i.e. below Rs 1,000 per month. Should we believe that it is possible for any middle class person to satisfy with Rs 1,000 or 2,000 per month?
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Stalinist · Posted: Wed Apr 23, 2008 10:54 am Post subject:

They didn't write that PCI is 1098. They estimated monthly expenditure as 1098. You didn't read the article properly.
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ved · Telugu Veera Joined: 26 Feb 2006 Posts: 2069

First understand what is DPCE and its relationship with DPCI for low and middle income people before you jump the gun.

Regardless of whether Rs 4000/month is enough or not, putting the number of these people at 4 crores ( or roughly 1 crore families) is pure rubbish. The number of families with income of at least Rs 4000/month is lot higher than 1 crore.

It is not only AJ article but I also read the original PHD thesis from Kannan, Sengupta and Raveendran from where AJ extracted this. In fact theirs is not as sensational as that of AJ article. They acknowledge tremendous progress India has made since 1994. They are only dissecting the composition of the growth more closely. There is lot of subjectively in their data and the analysis. All they are saying is that if you add extremely poor, poor and vulnerable, marginal and vulnerable, it comes about 836 million, leaving around 200 middle and high income people. I'm trying to collaborate the evidence differently.