Answer: 5% (Yes, only five percent)
2001: NCAER
| Income Class | Monthly Family Income* | % of Total Population |
| Poor | < Rs 7,500 | |
| Lower Class | Rs 7,500 – Rs 17,000 | |
| Middle Class | Rs 17,000 – Rs 85,000 | |
| Rich | > Rs 85,000 |
2005: McKinsey
| Income Class | Monthly Family Income* | % of Total Population |
| Poor | < Rs 7,500 | |
| Lower Class | Rs 7,500 – Rs 17,000 | |
| Middle Class | Rs 17,000 – Rs 42,000 | |
| Upper Class | Rs 42,000 – Rs 85,000 | |
| Rich | > Rs 85,000 |
McKinsey also makes forecasts for the relative sizes of the different income classes for the years 2015 and 2025:
| Income Class | 2015 | 2025 |
| Poor | 35% | 22% |
| Lower Class | 43% | 36% |
| Middle Class | 19% | 32% |
| Upper Class | 1% | 9% |
| Rich | 1% | 2% |
So McKinsey's picture is roughly like this:
| Year | Poor | ||
| 2005 | 55% | ||
| 2015 | 35% | ||
| 2025 | 20% |
- Middle class will increase from 5% to 40%.
- Poverty will go down from 55% to 20%.
- Lower class will hover around 40%.
7 comments:
Hello Dheeraj,
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Sudhir says:
January 9th, 2010 on 4:10 am edit
Interesting forecast.
Could you pls say more about the currency units used? Are they real (as in inflation adjusted w.r.t. some base year) or nominal (i.e. meaningless)?
In any case, governments everywhere have a vested interest in understating the true extent of inflation, simply because many govt liabilities such as employee pay, allowances and pensions have an inflation index built in.
What cheers me is the fact that the proper middle class in India (the ‘bike’ economy) and the upper middle class (the ‘car’ economy) are showing sustained growth rates far in excess of population growth. Their share in the popn hence simply has to grow as a matter of mathematical identity.
Let us drink to that. Jai Ho.
We thought we should allow you to take this up. Would you be interested to answer? If you do, please do so here
http://www.offstumped.in/2010/01/07/the-size-of-indias-middle-class/
Note #4 in McKinsey's report:
"In our study we adapted a methodology, from India’s National Council of Applied Economic Research (NCAER), defining the middle class as households with a disposable income of 200,000 to 1,000,000 rupees ($4,380 to $21,890) a year in real 2000 terms."
When we set our standards and labels, we need to take into account -how many people per family? One or two people with an income of 35,000 is very different than a family of 8 with the same income.
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