Stuck in the ‘middle’
The Indian middle class is growing fast and is touted to comprise over half the population in two decades; but their current miseries are hard to miss
60 percent of the Indian population will be considered “middle class” by 2047. More people entering this wide group is hearty news for consumerism as it signals more people with buying power; namely, middle class consumption to jump from USD 1.9 trillion to USD 5.2 trillion by 2031. Currently, at 31 per cent of the population, the Indian middle income group is growing at an annual rate of 6.3 per cent, says a report by Red Lab. The growth is across all income segments — for instance, almost 2.16 lakh people earn about Rs 1 crore every year; the number of Indians earning over Rs 10 crore annually has jumped by 63 per cent in the last five years touching 31,800; those making over Rs 50 lakh has upped by 25 per cent to about 10 lakh; while 24.82 crore Indians have “escaped” multidimensional poverty. The sordid reality is that the last category slips back into poverty as easily as it transcends it. As long as it’s an all-round ascent rather than a descent, we should be fine. But then the rich, of course, continue to get richer. Indian billionaires have trebled their numbers reaching 334 as per the Hurun Rich List of 2024. Therefore, even as we discuss the essential citizen category of the Indian middle class, let’s also review their current woes.
Today, a typical middle class individual is supposed to be earning between Rs 5 lakh and Rs 30 lakh per annum. While their earnings may be higher today, they are also spending more and saving less. Salaries have increased but so has the cost of living. Children’s education, healthcare expenses, and most importantly, food inflation has for long been creating a sizable dent in their income. As reports suggest, malnutrition is a painful reality in India.The rich are unhealthy by choice, the poor have none. Insights from the Food and Agriculture Organisation (FAO) of the United Nations report state that 74.1 per cent of Indians couldn’t afford a healthy diet as of 2021. A more recent United Nations report, the State of Food Security and Nutrition in the World (SOFI) published in July last year, found that over half the Indian population (55.6 per cent) can’t pay for nutritious food. With high food prices, many of our fellow citizens can’t regularly purchase meat, dairy, and fruits. To tackle malnutrition, the central government has introduced rice fortified with iron, folic acid, and vitamin B-12 in the country. But grains alone cannot contribute all the goodness that a human body needs, even as we propound a need to get back to our nutritional roots eating native grains such as millet. In such a scenario, it’s irrefutable that the long-standing high food prices have, therefore, been pinching the middle class.
Bad food habits means more health issues such as diabetes and obesity, and healthcare is not cheap either. The imposition of high GST and cost of medical parts required for surgery continues to swallow up hard-earned money. Cost of raw materials, expensive medical technology, and imported surgical equipment have been steadily escalating. Meanwhile, insurers today are widely considered to be disinclined towards rewarding claims, finding loopholes and increasing deductibles to lower claim amounts as much as possible. Education — shall I even touch upon this topic?! Speak to any parent for a few minutes and you can clearly see the financial toll their kids’ rising school fees is causing them. Quality education costs a pretty penny, which the middle class struggles to part with.
In this year’s Union budget, the government has, after a long time, recognised that the middle class is a stressed lot, badly in need of a fillip. Obviously, the middle class is also a huge votebank, whose discontentment was being heard through the ballot boxes. Whatever the reasons may be, it’s at least some progress for the strained group. The Budget brought some pleasant tidings by way of tax breaks, which would enhance household consumption as well as, hopefully, investments. It’s also pertinent to remember that encouraging the middle class to save, take loans, and invest, are essential for the nation’s economic growth. Hence, we see bite-sized systematic investment plans (SIPs) being launched by Securities and Exchange Board of India (SEBI). These micro-SIPs of Rs 250/- are meant to reinforce the depreciating trust in SIPs while popularising investment into mutual funds to lower income groups, and promoting financial inclusion in the long-run.
We often use the term ‘backbone’ loosely but the middle class is definitely the backbone of any country. After all, it’s their power of consumerism that keeps the wheels of the economy running. And it’s that strength of purchase that has made the Indian middle class the cynosure of all eyes. Global giants have been keen to tap the segment that’s often offered them expansion avenues far greater than their countries of origin. It’s time to prop up the middle.
The writer is an author and media entrepreneur. Views expressed are personal
