Mr. Allan Greenspan, former Chairman of US Federal Reserve had famously said: "When men start wearing frayed inner garments, it is time for economists to worry". And the research says it is time for Indian Economists (?) and Government (?) to take this seriously. Confused about the sign after word "Economists"? Don't be worried. I am as confused as you are. But I am sure, you have already guessed the answer for the question mark after the word "Government". While the true Economists are hard to find, the Citizen Economists are found at every Paanwala's shop. Now, about the other question mark: 'No government has ever worried about economy'. Now we have the answers for the intriguing question marks.
India's Middle Class has been a subject of curious research for some and speculative mirage for many others. From the definitions to the numbers, the Indian Middle Class is as neglected as the migrant workers during the 'infamous' lockdown, who have been the source of 'Bread' for Media, 'Butter' for Opposition and 'Toast' for the Government, at the expense of 'Hungry Stomachs and Bleeding Feet'.
So, Who are the Indian Middle Class?
Having failed to find an established and credible one, I dared to write my own definition. "Middle class is one who toils the most, collectively pays the most in taxes to Government, constantly struggles till the 'End' to make the 'Ends' meet, and retires with savings, barely enough for last rites". Hardly a Messiah! Uhhh!!
To make life more complicated and as miserable as our Messiah, there is further classification of the famed Middle Class. We have Lower Middle Class (LMC), Middle Class, and Higher Middle Class (HMC). I didn't have enough courage to write the definitions of LMC and HMC. I am sure, both are closest "Country Cousins" of Middle Class with relatively proportionate variation in their suffering.
Having dealt with the definitions, now let's move on to the numbers. Unfortunately, the population of Middle Class are as fluctuating as the electricity in most parts of India. No wonder, many 'Stabiliser' manufacturing 'Small' companies earn more profits than the builders who make 'Big' buildings.
Each Economist will give us different population size of Middle Class. Every successive government has redefined the income levels to suit their vote bank politics and to grab the 'I did it' kind of headlines. The haze around Middle Class is so much so that it prompts a question in my, not so enlightened, mind. Is this Middle Class or Muddled Class?
Out of 1300 Million (1.3 Billion) population of India, around 400 Million live under the apologetic banner of 'Poor' but choose the masters for the entire nation!!
Around 300 Million Population bloat and float in the ship called 'Rich' but possess and controls 80% of the country's wealth.
This leaves us with a massive population of 600 Million who are cut into 'Pieces' called LMC, MC, and HMC.
Now let's see how Poor, Middle Class, and Rich deal with their money.
Rich have money but do not save. They invest. Poor do not have money and therefore neither save nor spend.
So we have the Middle Class who not only save but also spend.
Unless people Spend, there is no Purchase. If there is no Purchase, There is no Sale. If there is no Sale, there is no Supply. No Supply means no Production. No Production means no Business. No Business means no Employment. No Employment means no Salary. No Salary means no Spending and no Savings. If no Spending....... Go back to the top of this paragraph. The cycle continues.
If no Savings, no Deposits in Banks. If no Deposits in Banks, no Lending to Businessmen. No Lending to Businessmen means no Business. No Business means........ Refer to the previous paragraph again. The cycle continues.
This proves that the Economy is sustained by 600 Million Middle Class, mostly salaried, who not only keep deposits in the Banks who in turn lend money to Businessmen but also spend money, making them the largest consumer segment for most products under the sky.
I am of the firm opinion that a strong and prosperous Middle Class will not only strengthen the books of the banks but also spur the much needed demand in the marketplace. And I am sure that a mere one half of '20 Lac Crores' in the hands of this Messiah Middle Class, will have proliferating effect and result in the revival of sagging Economy of our country.
Isn't Economics more simpler than we thought?
I firmly believe that YOU too can become the Finance Minister, provided you are NOT an Economist.
And that's not a JOKE.
Very insightful article with different but right perspective.
Excellent words! Very knowledgeable article. Awaiting for such good articles from you in the future. Keep up the good work!
Excellent! Hard Hitting Article - Written Quite Concisely; But, Pretty Blunt In It's Dissection Of The Economic Classes With The Apt Definition Of The Middle Class Bearing The Burden, Without Any Tangible Benefits, Whatsoever!
But, The Proferred Solution In The Form Of A Gargantuan Million-Lakh Crore Stimulus Directly In The Hands Of This Well-Ignored 'MC' -Should Ideally Catalyse Our Beloved Nation - Back Into Action!
Aptly depicted the role of every financial class. Truly, as usual middle class (specifically service class) will bear the additional tax burden to bring back the economy on track in coming years while political parties running Govt at the time will take the full credit.
“I firmly believe that YOU too can become the Finance Minister, provided you are NOT an Economist.” – I liked this one a most :)
Well written article about importance of middle class, backbone of our economy..