So how big is India's middle class?

May 13, 2013 14:18

India Ink, the New York Times's blog on India, has started a week-long series on India's vaunted middle class, comparing the myth to reality.

The blog points out: Only a quarter of India's 1.2 billion people can be defined as "middle class' according to standards set by the Asian Development Bank.

They are all in the top third, by wealth, of Indian society, but in absolute numbers they are about as big as the entire American population.

It then goes on to warn of structural weaknesses in India growth cycle that sets so much store by the middle classes.

For one, four out of five middle-class Indians are in the lowest bracket of spending power, meaning they can spend $2 to $4 a day, says India Ink. For another, the base of high-spending middle-class consumers is still small. The "middle middle' (spending $4 to $10 a day) and the "upper middle' (spending $10 to $20 a day) together make up just over 50 million people.

Then, of course, entrepreneurial middle class is still not strong enough for a country of India's size. The middle class still prefers to do jobs rather than create jobs; starting up companies is still not the normal middle-class thing to do.

You can read the interesting blog post here.

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