Introduction
The growing visibility of India’s middle class has become increasingly harder to ignore over the years. To date there is no official definition of the middle class in India. India’s middle class not only categorizes an income group, but also a political and social class and a consumer market. Although it comprises less than 30 percent of the overall population, approximately 300 million people (Deutch 1-4), and the middle class has spread wide scale socioeconomic changes throughout India’s small towns and cities as it is the fast growing segment of the population. This growing middle class has become the symbol for development in India today. New middle class communities have popped across the country along with new businesses to satisfy the consuming patterns of this growing class (Fernandes “India’s New” xiv). The sales growth of consumer goods such as televisions and mobile phones to the middle class has already been established, but a new range of products such as financial services is increasingly being geared towards this group as well. India’s upwardly mobalizing business class has not only gained national attention, but transnational attention as well from economists and political scientists alike. Transnational views for the most part perceive the increasing middle class as an opportunity to capture new consumer markets; for others, such as European countries and the U.S., the increasing educated work force potentially threatens their middle class because of outsourcing that occurs in service sector jobs (Fernandes “India’s New” xiv). Moreover, there is serious concern within India itself amongst those on the fringes of the middle class and the impoverished who are worried that they have been left behind and forgotten in this surge of socioeconomic mobility.
This essay will analyze the rise of the India’s middle class the role of a liberalized economy, its perceived culture, politics, and its positive and negative outcomes for those included as well as excluded in this class of people. In order to determine the relevance and implications of India’s rising middle class on a larger scale it is imperative to understand all of its intricacies.
Liberalizing India: Creating a New Middle Class
To further understand the implications and consequences of India’s rising middle class on national and transnational level, it is important to understand the policies and culture that have spawned this new middle class. India’s new middle class has its roots in the political economic policies of liberalization. India’s economic liberalization began in the early 1990’s, with deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment. Disenchantment with early socialist ideals of the state can be traced to the post emergency era of the 1970s (Bowond 44-46). The task of the planning commission was minimized during the 1980s, when national expressions emphasized the efficiency logic of private sector-led urban development (Bowond 44-46). The emphasis has now moved to a decentralized approach that advocates local economic progress and privatization instead of distributive justice and balanced regional development. The liberalization of India’s economy has opened up its national markets to global competition which in turn has benefitted India. Since adopting liberal economic policies India’s economy has experienced a seven percent economic growth following 1997 (CIA 1). Despite its economic growth India has experienced a widening gap in its inequality.
Compared to other developing countries, India’s Gini coefficient, which measures inequality amongst populations, is relatively low. India’s Gini coefficient falls just under thirty five, but it has been gradually increasing since liberalizing its economy (Deutch 1-4). Many of those in favor of liberalization will often times report that it reduces poverty and although this may be true to a certain extent, the Gini coefficient has measured growth in the gap between India’s rich and poor in tandem with growth within the classes themselves. Thus, although the poverty level in India has been on the decline following economic liberalization, the rich continue to get richer in comparison. Therefore the middle class, or the “new rich” of India, largely supports and promotes the liberalized culture that has given it birth. In past economic transitions those who stand to benefit the most from liberalization are them members of the middle class sector of an economy. In turn, many businesses stand to benefit from this rising middle class’s purchasing power.
Money Talks: The Purchasing Power of India’s Middle Class
Following the liberalization of its economy India has witnessed a range of images that have depicted the changing practices of consumers due to the newfound wealth of its latest liberalized middle class (Fernandes 2421-2432). Entrepreneurs and business men are now the popular public figures that Indians aspire to emulate. The immergence of this new class is similar to the emergence of the bourgeoisie following the industrialization of Europe; even if India is not yet seen as an industrialized country, the emergence of this middle class can be seen as hopeful for those who fear that unindustrialized nations will be left behind in the progression of globalization. As India’s middle class rises in status its consumption habits for material goods are changing with their increased incomes. In accordance with simple economic principles, as an individual’s income increases so does the amount of luxury goods that he or she will consume. This phenomenon is occurring everyday amongst India’s middle class. Currently, discretionary spending in India accounts for 52 percent of overall private spending, but by 2025 discretionary spending of India’s middle class is expected to account for 70 percent of private spending (Mkinsey 4). Even though India’s 2025 projected consumer market has not yet arrived, both domestic and multinational companies have their work cut out for them. It is most certain that those incumbent businesses already supplying discretionary goods demanded by India’s middle class hold the upper hand in this future market, but they too face challenges to meet the changing trends and demands of the rising middle class if they look to prosper in the future (Mkinsey 2).
The middle class in India not only covers an income group, but also a political, social and consumer culture (Deutch 1-4). It is this middle class that is rapidly accelerating the changing landscapes of traditional India and replacing them with modern malls and fast food joints. India is witnessing a rapid change in its consumerism as the demands for more luxury goods are made available through its liberalized economy. Prior to liberalizing its economy many foreign goods were only available to upper class Indians who were able to import goods from nearby countries by means of relatives or by going to other countries to purchase western goods (Fernandes “Nationalizing” 614). As Leela Fernandes states, “this transformation in the political culture of India has suggested in a way the re-imagined Indian nation in the context of globalization” (“Nationalizing” 614). Attitudes of spending are undergoing transformation as well. Where the traditionally Asian families have stressed the importance of saving, today the attitudes of young Indian consumers, inspired by job security and comfortable wages, are to spend. Being more enthusiastic to spend has also led India’s middle class to take on more debt. Credit card users have exploded in the last five years from 6 million in 2005 to 28 million in 2009 (Deucth 1-4). As luxury spending habits of the middle class continue to increase, those who are not considered middle class are being overlooked and not just in their purchasing power, but human rights.
India’s IT Sector: Boom for the Middle Class, Bust for the Lower Class
The development of India’s service sector has also been of focus and often times seen as the main factor for increased economic growth since the 1990’s. The demand for white collar jobs and the expansion of the service sector has directly been linked to the expansion of India’s middle class. It is because of this of this direct correlation that those who are considered middle class in India’s economy today are largely classified as such because of their occupation, as opposed to the past where working in an industrialized job classified you as middle class. Today those middle class working in the high tech industries have become important symbols of India’s newfound success in the global economy (Mukherjee 2-32). It has indeed proven to be a very promising sector for India’s middle class who have seen an increase in new jobs in information technology for every year following 1999. Between 2002 and 2003 in the IT sector there was a twenty four percent growth (Fernandes 2421-32). Salaries have also continued to increase considerably in white-collar jobs. As the salaries and demand for IT workers increase so does the desire for a college education, which many of India’s middle class contain. For some this increase of middle class workers in the IT sector is believed to be attributing to the uneven distribution of wealth in India’s economy, particularly in those areas where IT development is strongest. As well as contributing to a corporate elitist culture that is further discriminating against the impoverished.
In research published by Dr. Sanjukta Mukherjee entitled, The Bangalore Brand: Uneven geographies of India’s hi-tech boom, Dr. Mukherjee draws the connections between the Bangalore’s IT cooperate sector and its favor of liberalized economic growth models as the main cause of the “increasing social gap between the rich and the poor” (Mukherjee 2-32). Bangalore is to India what the Silicone valley is to California. It is India’s largest IT exporter and is its fastest growing metropolis. Due to these facts Bangalore is the ideal location to study the impacts of a liberalized IT sector on the middle class and those on the fringes of it.
In the process of globalization the neoliberal market creates competition amongst cities worldwide for the label of global cities in order to attract capital (Mukherjee 2-32). The Indian government, along with IT elitist/middle class, has participated in advancing Bangalore’s status to a global city, but they have done so at the cost of the lower class. Ignoring the socioeconomic improvement of the city, the government has instead decided to place more emphasis on the economic growth of its IT sector and the needs of it growing middle class that drive its growth. As result of this agenda when decisions for growth are made they are often times undemocratic, because usually those making the decision are outside parties such as think tanks that have local ties to the IT sectors allowing them to call the shots alongside local politicians (Mukherjee 2-32). This atmosphere creates for unequal distributions of political and economic power. It could be argued that increased investment solely in Bangalore’s dominating IT sector in return would yield more profits to the area as a whole, due to tourism and increased flow of capital from the IT middle class into the hands of the lower class merchants. One could make a very convincing argument using this approach, but still there are those individuals who would never even reap these benefits because of physical displacement from Bangalore.
The Bangalore Agenda Task Force (BATF), a state sponsored program whose mission is to modernize and improve upon the city’s infrastructure, has reverted to forms of urban renewal projects. BATF is led by Nandan Nilekani, CEO of Infosys, and its affiliates are comprised of other IT companies. Like many of the urban renewal projects in India and elsewhere around the world, it is often times the impoverished areas that are home to the lower class that get demolished for modernization projects. In the case of BATF the creation of a golf course for the IT employees and business associates and a private airport took the place of local farmers who were forced to relocate from their land. Even though money had been granted to the farmers for their land, it was only enough to sustain them temporarily, forcing them out into the streets to find other ways of producing income (Mukherjee 2-32). BATF’s other “improvements” in the attempts of modernizing Bangalore have included the clearing of beggars, squatters and unauthorized vendors from certain districts of the city without addressing the issues these have caused, ignoring these inconveniences to their vision of modernity. For its efforts BATF receives recognition, as well as funds, from the World Bank as a leading example of private and public sector collaboration in the development of cities. The WB has throughout the years been a major influence on infrastructural provisions, which have redirected the Indian government’s interest away from the issues of welfare, class equity, and basic needs of its people. This mode of development is common among economically liberalized countries who seek funding from the WB. The politics at play in the development planning and agenda for India are very much influenced by economic liberal ideologies as well.
Political Perceptions and Impressions of India’s Middle Class
As the middle class creates its own niche in India’s political sphere, it has along the way developed an anti - poor, anti - working class sentiment. Much of this frustration towards the working class originates from the middle class’ disillusionment with India’s political system, which they feel is more concerned with issues of the working class and poor ( Fernandes 2421-32) . It is this anger due to the unrepresented interest of the middle class that is at the core of the political outrage. In addition India’s middle class resents what they see as gratuitous state support for the working class and the poor (Fernandes 2421-32). The typecasting of India’s poor working class as lazy, dependents of government aid, and as threats to civil society is played out in the English-print media’s negative coverage of the working classes struggles; more specifically this can be observed in those outlets that cater to India’s emerging middle class (Fernandes 2421-32). As a result, India’s middle class habitually shares a preordained view in which they believe the poor and working classes are subject to their situations of poverty and furthermore consciously choose to exist in poverty. Many of these prejudiced attitudes directed at the lower classes are also echoed in the community based activist movements of India’s middle class. Rallying around their negative sentiments of the lower class many middle class groups have organized against the government’s willingness to grant slum - dwellers residential rights, who generally would be driven out by the development programs of the state (Das 208). Inter-class conflicts between the middle and lower classes in a historical context is nothing new to India, but it is not coincidence that the same economic policies of liberalization that would have pushed to evict the slum-dwellers have served as a launching pad in giving rise to India’s new middle class. The middle class is mirroring the ideals put forth by a liberalized global economy, because in a liberalizing India they are in a position to benefit greatly.
Conclusion
The Rise of India’s new middle class is something of great interest especially to those entities who wish to capitalize off their commercial consumption. The liberalization of the Indian economy has brought about change to India’s socio-economic landscape at a very quick pace. Globalizations impact on the Indian people has been most evident in the rise of India’s middle class and their purchasing power that has given many people the opportunity to experience the comfortable life that many westerners enjoy. Acculturation of liberalized lifestyle for the most part has smoothly transitioned into Indian society. With pressures from outside forces such as the World Bank, India has made efforts to modernize their cities. The middle class’s demands for modernity too are one of the driving forces that are causing the Indian government and private sector to invest in development. At some point there will need to be efforts both by the Indian government and all those who stand to proper off the middle class that will need to investigate what is necessary for this phenomenon to continue on into the future. Today we see many countries middle class dwindling, so it is imperative for India to consider ways to continue increasing the middle class. With the purpose of sustaining the growth of middle class it is necessary for India to satisfy the needs of this distinctive group while simultaneously meeting the demands for a growing economy. This would entail investing in education and job training to ensure long term growth.
Finally it is important for the Indian government to set in place programs that will also protect those that are not incorporated into this growing section of the nation. For those lucky enough to afford an education and job training the prosperity of joining the middle class is bright, but for those who cannot the likely hood of social mobilization is grim. It is also important that when planning for development that those not included in the middle class are not ignored in their needs. Many of the developmental projects focused toward the middle class often times interrupt the lively hood of those lower classes.
The most striking feature of contemporary India is the rise of a confident new middle class… whether India can deliver the goods depends a great deal on it. – Das (2000)
No comments:
Post a Comment