Friday, November 29, 2013

Who is middle class

The Times of India, Hyderabad of Saturday, November 23,2013 carries an article ‘India’s middle class awakes’ by Pavan K Verma. He writes, ‘If we take a strictly economic criterion of defining a middle class person as anybody who belongs to a household which has a monthly income of between Rs 20,000 and Rs 100,000 a month, the middle class starts to look very substantial. Estimates reveal that as per this criterion the size of the middle class in 1996 was a paltry 25 million. Today, it is in excess of 160 million’.

160 million sounds big, but it is just about 15% of our population. And the criterion is unconvincing.  May be that is the reason the word ‘if’ is used.
Census figures of 2011 are available in my post ‘ lest you forget’ in this very blog.
As a manager in a PSU my gross salary in 1996 was Rs.13774/-( IT deduction was Rs.3402/-;net was Rs.7619/-) in 1999 it was Rs.17770/-(IT deduction was Rs.2799/-;net was 7080/-). The purchasing power of Rs.7000/- that time gave me a least uncomfortable living.
The point is I was much below Mr. Verma’s middle class. Today at least Rs. 30000/- net carry home salary is needed for the comfort level that Rs.7000/- provided in 1996-99.

 My views on classification are as follows:         
Those whose income is 2 lacs a year and not liable to pay IT cannot be considered as middle class. They get around 16600/- a month.

Those who pay 10% IT beyond 2 lacs can be considered lower middle class. But we cannot compare life of those getting 4 to 5 lacs with those getting less than 3 lacs.

 Those who pay 20% IT i.e. with income between 5 to 10 lacs can be mid-middle class. Even here one cannot compare life style of someone getting 5 lacs with another getting 10 lacs. It is very painful to call all of them mid-middle class.

Then those getting 10 lacs and above are upper middle class. But ceiling of middle class can be for those getting up to 15 to 20 lacs.

 Beyond 20 lacs upper class can be divided into lower upper, mid-upper and upper.

There are rich and super rich who really matter in every field.

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