The Vanishing…

And Other Stories of Appearances

Bishal Thapa

One May morning India woke to discover that her middle class had disappeared. Some 250 million middle class Indians by the World Bank’s last count were suddenly gone. The Indian middle class – the shine in India Shining, the class that had supposedly transformed India from an archaic mystery of snake charmers to a contemporary global power house – had vanished. Poof, just like that into thin air! 

I got out of bed, asked the maid for some tea and checked the blackberry. Everything seemed ordinary. I called the trainer next to reschedule our session at the gym. He grumbled about this being the third time. Punk! I had to cajole him into allowing the change. He was overpriced anyway. After a month with him, it seemed the only thing he had taught me was that pushups could be done 125 different ways. The gut still hung loose.

I switched on the news. The 32 inch LCD TV came alive brightly with the usual humdrum for the news. Economic growth racing towards 9%; Maoists burning through the eastern part of the country; regional right wing parties trying to keep everyone else out of Maharashtra; continuing saga of the bumbling politician sparring on twitter with the visionary-later-turned-slimy businessman; long haired godmen caught in compromising positions with dusky long haired beauties; the eternally gifted cricket batsman who couldn’t duck fast enough in the face of a racy bouncer because his big stomach got in the way. A typical morning with my middle class existence very much intact – what then was all the fuss about?

The fuss started with a new study.[1] A new definition of the middle class proposes to include only those people that earn more than $10 a day but are not in the top 5% of the country’s income group. India has nobody in that category. Everybody who earns above $10 a day ($3,650 / yr or approximately Rs. 182,500 / yr) is also one of the top 5% income earners in the country. If these findings are correct, which it appears to be, and if the new definition is internationally endorsed, which it is likely to be, the revelation would present a biting review of India’s glorious two decades of economic liberalization and progress. Who had the all this growth touched? Were a mere 5% sharing the spoils of all that growth?

As an Indian middle class, it is important not to let dour news get in the way too easily.

To begin with, the news was really not all that bad. Though India has no middle class, China, now the global benchmark for everything good or bad, depending on your convenience, only has 3% of its population in the middle class by that same definition. Twenty years ago it had none. India’s absence of a middle class doesn’t seem that far off.  

India’s economic growth has had an impact on the poor. In the ten years between fiscal year (FY) 1994 and FY 2004, some 30-50 million Indians had been lifted out of poverty. And in the years since 2004 poverty rates have been declining much faster, though the recent economic downturn may have reversed or maybe threatening to reverse some of these gains.

Keeping track of India’s poor can be a tough job though. Official figures estimate that in 2004-05 India had 290 million, or 28% of the population, below the poverty line. Under persistent criticism of its current methodology for measuring poverty, changes being considered by the Government would put another 100 million below the poverty line. Approximately 400 million Indians would fall below the poverty line by simply changing the way we count our poor.

That’s not where it ends. India’s poverty line is extremely thin, very porous and dotted along the way. Over 60% of the population – or 630 million people – or 750 million people if you believe non-governmental estimates, have per-capita consumption of less than Rs. 20 per day (less than 50 US cents a day).

While one study erases India’s middle class, another doubles India’s poverty! Hundreds of millions of people are transported seamlessly from one category to the next, unlike the paralysis that in reality binds us down. 

I never did make it to the gym that May morning. The 126^st variant of the pushup, if there is one goes unattended – the gut hangs listlessly. We remain in a trance like limbo trapped between our glistening LCD and the clinginess of the less fortunate around us.

India’s paralysis stems from her inability to decide whether she is a rich country or a poor country. It is not merely a symbolic tussle, or an esoteric analysis lost in the counting of the middle class and the poor. It is a paralysis that pervades deeply, plays out daily within our government, in our policies, in our dailies lives and in our traffic.

It was a busy intersection in the evening rush hour in Pune – a sleepy wannabe industrial town that had transformed to become a storied success of India’s IT revolution. I was the passenger and my friend was driving. There was a slight drizzle, the roads were wet. Vehicles jostled for position with pedestrians and cyclists. Nobody gave an inch. Some swore, some swerved and some simply shook their heads. We waited impatiently wiping the fog off the windshield and breathing in the cacophony of sight and sound that had enveloped us all.

Just as we had the signal to go and a bit of space ahead, out emerged from the left a bullock cart tugged by two feeble oxen and an old man atop a bamboo carriage with rickety wheels. The man had a long whip and unmindful of the traffic bade his oxen on through the intersection. The traffic stopped to let them through. For a moment everything was still. The only sounds were that of the oxen bells and the drizzle on the windshield.

“I’m glad I’m back,” I said delighting in the brief transcendental moment. “I would never be able to get these sights abroad.”

“Everything looks good from the safe distance of the middle class,” replied my friend as the bullock cart crossed over and the cacophony resumed.       

9 August 2010.

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[1] Nancy Birdsall. 2010. “The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest.” CGD Working Paper 207. Washington, D.C.: Center for Global Development. http://www.cgdev.org/content/publications/detail/1423994 [This paper is forthcoming as a chapter in Ravi Kanbur and Michael Spence (eds.), Equity in a Globalizing World (World Bank).]