Page 308 - DSOC202_SOCIAL_STRATIFICATION_ENGLISH

Unit 14: Emergence of Middle Class System

consumption. Packet modernity or modernity of the pocket. Neat, attractive and well-bound, Notes
pocket modernity, best symbolised by the remote control or the mobile phone, can be hand-held
and controlled. Its powers are (literally) graspable. It is amenable to easeful handling. Its jolts are
controlled by the button and, best of all, it requires no fine tuning of the mind. Pocket modernity
is politically conservative and socially and economically exclusive. It feeds middle class
conservatism, pitching its sales talk at “family” and “Indian culture.” Raymonds and Indian
marriages or MacDonalds and vegetarian families. Is it at all surprising that the great Indian
middle class offers the most Willing ears to the Hindu right, whose cultural organisations aim to
preserve “national” symbols as the “sanctity of womanhood” and whose political organisations
encourage disinvestment, privatisation and enhanced entry of multinational companies.

The middle class Indian flees from modernity of the mind. Freedom terrifies him because
it demands individual responsibility. Collective (read caste and family) responsibility
offers a security that is difficult to resist. Female modernity challenges his patriarchal
authority and opens up the frightening abyss of sexual choice.

The Great Indian Middle Class
A truer measure of India’s failure is not its present level of poverty, but its inability to create a
middle-class. India’s middle-class constituted less than 10% of the population in 1984 and 1985,
according to the National Council of Applied Economic Research (NCAER). Since then, it has more
than tripled, but is still less than 20%. If our country’s economy grows 7% over the foreseeable
future and if the population increases anually by 1.5%, if the literacy rate keeps rising and if we
assume the historical middle-class growth rate of the past 15 years, then half of India will turn
middle class between 2020 and 2040.
The growth of the middle class and the economic growth of India are in a virtuous cycle. Rising
incomes lead to more consumption, which in turn leads to higher economic growth, then more
employment opportunities and subsequently higher wages and the circle starts again.
Thus, as the middle class grows and continues to increase domestic demand, the economy will
also continue to grow. In terms of consumption, real private consumption (including both
households and private companies) accounts for approximately 55% of GDP. The growth of the
middle class will continue to increase household consumption in the country. The middle class
also demands better healthcare and education. In addition to the benefit of strengthening human
capital stocks l0 and thus productivity, this also leads to more private expenditure on healthcare
and education and thus improvements in existing infrastructure. In fact, the CLSA survey of
middle income and upper-middle income behaviour showed that education was the third largest
household expenditure behind essentials such as rent/mortgage and groceries. In terms of
investment (already around 35% of GDP), the growth of the middle class will also make an impact
as it will force more business to expand or new business to take root.
The middle-class is also increasing its share of financial investments and thus providing new
sources of capital for companies. Although household savings and investment rates as a per cent
of GDP have remained relatively the same over the past several years, investment in shares and
bonds has risen over the past several years. As the middle class recovers from the crisis, this trend
should continue.
When half the population in a society is middle class, its politics will change. Its world view will
be different, its poor will be fewer - and society will have greater means to look after them. Thus,
to focus on the middle class is to focus on prosperity. This is unlike in the past, when our focus has
been on redistributing poverty. This does not mean that we are becoming callous. On the contrary,
the whole purpose of the enterprise is to lift the poor - and lift them into the middle class.

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