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Many layers within India’s middle class

The middle classes may comprise nearly 40% of the country. This has varied implications for the evolution of democracy and economic choices.

india Updated: Apr 16, 2019 08:55 IST
Swati Ramanathan and Ramesh Ramanathan
Swati Ramanathan and Ramesh Ramanathan
Hindustan Times, New Delhi
Hindu,Middle class,Indian middle class
Middle classes are normally thought to be urban, but the largest chunk of this population lives in rural areas.(HT Photo )

As India grows, it gets more middle class people.

Depending on the measures used, the estimated size of this middle class ranges between 78 million (Economist, Jan 2018) to 604 million (Krishnan and Hatekar, EPW June 2017).

What are the political implications of the expansion of this class? How will it affect the evolution of India’s democracy? Is it interested in economic well-being and progress, and uninterested in politics? If it does participate in politics, will this class promote patronage politics and lower the quality of democracy? Or, will it deepen democracy?

Others have tried to answer these questions. On economics, most observers, if not all, believe that this class favours market-oriented liberalization, something India has witnessed since 1991. Indeed, it is argued that this class is the social mainstay of India’s turn towards globalization and internal economic liberalization. On politics, the opinions vary. Some argue that this class has separated from mainstream politics, craving technocratic solutions to economic problems. Others say that this class is illiberal, exhibiting a Hindu majoritarian proclivity and it would not mind leaving the minorities ever more vulnerable.

We submit that India has many middle classes (Easwaran Sridharan of the University of Pennsylvania’s Institute for the Advanced Study of India was the first to use the term ‘middle class’ in plural).

These classes neither have the same interests, nor do they speak with the same political voice. Some vigorously participate in politics; others are disengaged. Some are Hindu majoritarian, others would prefer a less aggressive Hindu voice even as they support freedom of religion and minority rights, and still others hold more inclusive views on secular matters.

There are four parameters that distinguish the many middle classes: location (rural or urban); occupation; education (high school or college); and vehicular ownership (2-wheeler or car). The parameters related to location and occupation are self-explanatory, as is the parameter on education, with one clarification: the Rising Middle Class is one with high school or college education, but whose fathers (not mothers) were illiterate. The fourth parameter relates to vehicular ownership because vehicular assets are likely to be a more robust indicator (Krishna and Bajpai, EPW, 2015). Their arguments for this choice are threefold: assets are less susceptible to seasonal fluctuation, unlike income and expenditure; people themselves identify the possession of incremental assets as intrinsic markers of vertical mobility; and there is social status associated with assets, especially of certain kinds. In any event, there is significant correlation between data on assets and income/expenditure.

Based on these parameters there are actually five middle classes in India: Rural Middle Class, Public Sector Middle Class, Urban Private Sector Middle Class, Trader Middle Class and Rising Middle Class. This may sound technical, but in the real world, the difference between a mid-level bureaucrat and a senior manager in a private firm, is all too obvious.

How big are these middle classes? According to our calculations, they accounted for around 33% of India’s population in 2014 (we used the National Electoral Survey (NES) conducted by CSDS/Lokniti for the years 1999, 2004, 2009 and 2014, summarised in Table 2).

Given that the proportion is up from 11.7% in 1999, the current size of India’s middle classes could be 40% of the population. Interestingly, contrary to the perception that India’s middle class is primarily urban, the Rural Middle Class at 13.7%, is the single largest category. Adding Trader middle class- Rural, and Rising middle class – Rural, the overall size of Rural middle classes is 2/3rd of India’s total middle class. Essentially, there is no difference between the Rural-Urban distribution of India’s middle class and the rural-urban distribution of the overall population. Rural India’s economic demographic is no different from Urban India’s.

The Urban Private Middle Class is the fastest growing category among the middle classes, increasing seven-fold from 0.4% to 2.7%, and while this is still a small proportion, this class has a disproportionately large agenda-setting capacity. Unfortunately, we don’t have data on the Public Middle class – those employed across all tiers of government – post the 1999 NES survey, when it formed 3% of the overall population. It would be good to understand the trajectory of this class, since its preferences could be different from other classes. The Rising Middle Class is a large and fast-growing group, growing from under 5% in 2004 to close to 12% in 2014. This category may well become the single largest category among the many middle classes in the next decade.

So, based on the 2014 data, what do we know about the country’s many middle classes?

There are some surprising caste/community patterns. At an overall level, the upper castes are over-represented in the middle classes; OBCs are fairly represented; Scheduled Castes and Scheduled Tribes are substantially under-represented, and Muslims are marginally under-represented. Disaggregating further, OBC share is higher among Rural (2-wheeler), Trader(2-wheeler) and Rising Middle Class, and substantially lower among Urban Private Sector Middle Class. While SC/ST shares among Rising Middle Class are closest to their share in overall population, they are virtually non-existent among Trader and Urban Private Middle Class.

The share of Muslims is higher among Trader Middle Class than in the overall population, and Muslims generally have higher representation among the urban middle class than the rural middle class.

But what do India’s many middle classes believe in?

In terms of political participation, the Urban Private Sector Middle Class (UPMC) is the least politically engaged, either through voting, or other forms of political engagement such as participation in rallies, and fund-raising for or membership of parties. The Trader middle class (TMC) is the most politically engaged, with the Trader MC- Rural being more politically engaged than the Trader MC-Urban. In general, rural middle classes are more engaged than their urban counterparts.

When it comes to voting criteria, the UPMC makes voting choices differently than the other middle classes, giving equal weightage to both candidate and party, whereas the other middle classes give twice as much weightage to the party as to the candidate.

In terms of economics, the many middle classes have very different views.

A greater share of urban middle class wants the government to spend more on infrastructure over subsidies – perhaps a reflection of the disproportionate share of subsidy benefits that the rural middle classes receive compared to their urban counterparts.

On foreign investments, surprisingly, India’s middle classes are generally not very supportive of unrestricted access, with the highest resistance coming, again, surprisingly, from the urban private sector middle class.

The rising middle class feels the strongest about striking workers, with close to 50% agreeing that government should curb strikes. It is counter-intuitive that the rising middle class should feel this, but it is perhaps a reflection of their fear and insecurity about disruption and income loss arising out of strikes.

What are their views on cultural and social issues?

The middle class, in general, is ambivalently illiberal on cultural issues. However, there are differences between the many middle classes – the urban middle classes (and especially the urban private middle class) hold more strongly illiberal positions than their rural counterparts.

On the question of whether the views of the majority community should prevail in a democracy, about 60% of urban middle classes either strongly agree or somewhat agree, compared to closer to 50% who hold similar views among rural middle classes. Among the groups, the category that holds the strongest views on this question are the Urban Private Sector Middle Class (64%). Similarly, on the question of whether reservations based on caste and religion divide the people of India, the Urban middle class groups hold a much stronger view that this is so (close to 65%) compared to their rural counterpart (55%). Here again, the Urban Private Middle Class holds the strongest views, with close to 75% agreeing that reservations divide India.

On the question of whether the government should treat minority and majority communities the same way, urban middle classes are stronger in this view than rural MCs (over 70% compared to 60%). Once again, Urban Private MC feel strongest about this, with close to 80% agreeing with this position. However, an overwhelming majority of the middle classes across both urban and rural India believe that the government should make special provisions to accommodate minorities. Going against trends, the Urban Private middle class have the highest share agreeing with this view (68%).

Of the many middle classes, three— the Rural Middle Class, the Rising Middle Class, and the Urban Private Middle Class — deserve special attention. The large Rural Middle Class has been hiding in plain sight: this blind spot has resulted in little understanding of their positions, preferences or politics, specifically their differences with the rural poor.

The Rising Middle Class will soon become the largest single bloc, and bring new forces to politics, informed both by their subaltern caste composition, as well as their different livelihood patterns. The Urban Private Sector Middle Class will, despite being numerically small, have disproportionate impact on political agendas, given its networks and greater access to English media.

Each of these middle class groups has its preferences, and will find ways to voice these needs, contest competing claims, and build coalitions, as it seeks to shape political outcomes. As an example, both the urban and rural middle classes may well come together to oppose new forms of cash-based subsidies that are currently being discussed, but for different reasons: the former because they don’t get any subsidies anyway, and the latter because they lose the in-kind subsidies (e.g. fertilizer) that they currently receive.

In other areas, the urban middle classes may find common cause with the poor in very few cases (such as public transport), but not for the specific needs of the poor. For example, on major issues like healthcare, education, affordable housing etc, the middle class has effectively seceded from the state, and secured these services from private sector providers.

This means that we are unlikely to see grand social coalitions that can catalyse the emergence of a welfare state in the classical sense in India — i.e. universal access to public goods like education and healthcare. For these, the poor will have to fight by themselves.

The convergent and differing views of the many middle classes will impact a vast range of issues in India’s development: its economic trajectory, political formations and social compacts.

In our view, the 2019 elections will be the first to see the impact of these positions in a meaningful way. We believe that the importance of India’s many middle classes has so far not been fully understood, certainly by most political analysts and possibly by some political parties.

(The authors are co-founders of JANA Group. The article is based on a soon-to-be-published
working paper)

First Published: Apr 16, 2019 07:17 IST