THE SHASHI THAROOR COLUMN
Who is this middle class?
`The economic transformation of India since liberalisation is real, but it will be a while before the average middle class Indian tosses her Lakmé aside for a Lancome, or trades in her handmade salwar-kameez for a Ralph Lauren pantsuit.'
ECONOMIC MYTHOLOGY: A class of society ready for globalisation? PHOTO: REUTERS
WHENEVER I hear foreigners talking about the Indian "middle class", I wonder what they mean.
Much of the clamour about economic reforms has focused on this group, which may be sociological but is not entirely logical. The conventional wisdom is that this middle class is some 300 million strong — larger than the entire domestic market of the United States, say the marketing gurus — and, together with a very rich upper class, has both the purchasing power and the inclinations of the American middle class.
Today's economic mythology sees this new Indian middle class as ripe for international consumer goods. Our television channels and glossy magazines overflow with ads for foreign brand-name products from Daewoo Cielo cars to Ray-ban sunglasses. This is why Kellogg's rushed in with their cornflakes; Nike got our then cricket captain, Mohammed Azharuddin, to endorse their sports shoes (sparking off an unintended controversy since his name is also that of the Prophet and could not adorn an item so lowly as footwear); Mercedes-Benzes began rolling off the automotive production lines; and Johnny Walker Black Label scotch has become an Indian brand, not just one purveyed by smugglers. It was once said that more bottles of Johnny Walker Black Label were sold in India than were distilled in Scotland: now the joke may literally come true.
The NCAER survey
But all these manufacturers, I hear, have been dismayed by the weak response of the market, for the Indian middle class is not quite what it's cracked up to be. A survey conducted between 1986 and 1994 by the National Council of Applied Economic Research (NCAER) in New Delhi had already found that India's consumers could be divided into five classes, not three: the very rich, of six million people (or one million households), the "consuming class" of some 150 million (half the conventional estimate), the "climbers" (a lower middle class of 275 million), the "aspirants" (another 275 million who in America or Europe would be classified as "poor"), and finally the destitute (210 million). Of course the numbers have gone up by another 100 million or so in the decade since the survey was conducted, but the relative balance amongst these five classes, despite some progress in all of them, is unlikely to have changed dramatically.
The worst news for foreign consumer goods marketers was that it is only amongst the one million households of the very rich that there exists a sustainable interest in the products of Kellogg, Nike, Mercedes-Benz or Johnny Walker. Of course the others buy goods — but these are more basic, and cheaper, than multi-national corporations produce. If you're selling tea or cooking oil, you have a vast Indian market, spanning all five classes; leather sandals and ready-made shirts reach half the population; rubber thongs and plastic buckets delve even deeper; but sports shoes that cost a chauffeur's monthly take-home pay? Forget all but the smallest group at the top.
Not that Indians aren't spending more and acquiring more: since the 1980s, there has been a veritable boom of buying. On my visits to rural South India — Tamil Nadu and Kerala — I am increasingly struck by how many village houses are of pukka construction rather than mud or thatch, and even more by how many have some sort of vehicle parked outside — in most cases a bicycle, but there were also scooters, other two-wheelers, and in some cases cars. An astonishing number of roofs sprout television antennae, and a few houses even sport a satellite dish. This empirical, if unscientific, evidence is confirmed by the NCAER study: TV ownership is rising, and all but the most destitute own wristwatches, bicycles, and portable radios. Smaller but still significant numbers buy electric irons and kitchen equipment. But this is a far cry from preferring Macallan to Kingfisher, let alone buying a Benz.
Cumulatively, the NCAER survey concluded, India has a "consuming population" of 168 million to 504 million people. But what they consume, and how much they can afford to pay for it, is another matter altogether. One thing which is noticeably changing is our national indifference to global brand names, which is the legacy both of four thousand years of traditional civilisation and nearly five decades of self-reliant protectionism. But change is still slow in global terms; and in any case, the items most Indians buy, from household detergents to hair oil, and from cigarettes to snack-food, are those where Indian brands have an advantage in both familiarity and price.
All of which suggests that, though we do have a middle class, in many respects it consumes fewer "consumer goods" than the working-class in the West. The economic transformation of India since liberalisation is real, but it will be a while before the average middle class Indian tosses her Lakmé aside for a Lancome, or trades in her handmade salwar-kameez for a Ralph Lauren pantsuit. After all, why shouldn't globalisation speak with an Indian accent?
Visit the author at: www.shashitharoor.com
Printer friendly
page
Send this article to Friends by
E-Mail
Magazine
