Where is India's middle class?

Livemint points to a Pew research work which highlights that while the global middle class (with per capita incomes more than $10 per day) has grown from 7% to 13% of total population in the 2001-11 period, nearly two-thirds continue to remain poor (less than $2 per day) or low-income. 

The income distribution barely shifted at the top half of the income ladder.

In India, while the share of poor declined from 35% to 20%, the middle income hardly changed, inching up from 1.4% to 2.6% in the same period. In fact, among all its major peers whose middle class share is more than 20% of the population, India is easily a disconcerting outlier in its middle-class share. 

This raises several disturbing questions about the country's long-term growth prospects. At 3%, those with middle class incomes and above constitute just 37 million, and is clearly not growing at a satisfactory enough rate to sustain very high economic growth rates. Simply put there aren't enough Indians around who can afford refrigerators and cars, shop at the malls, buy a house in a metropolis, send their children for management education or get treatment at Apollo hospitals, or take-off for annual vacations within the country. Further, since the stock of middle class is growing ever so slowly, the boost from the pent-up demand may be tapering off. Even doubling this estimate, assuming the Pew study is off the mark (which is unlikely given that the recently released Socio-Economic Survey of India points to similar trends), does little to minimize the concern.

Update 1 (01.03.2016)

The Livemint points to this graphic on India's very narrow middle class. The lowest income tax assessee comes in at the 94.2 percentile of income distribution, whereas those paying in the highest income tax bracket make up just 0.5% of the population.

Population density visualized

Two superb graphics which highlight how population density can affect the spatial dynamics of countries. The first shows the space, in term of area of US states, required to accommodate the total world population at the same density as in some global cities.

The second (sent by a friend) shows the sizes of different cities and their population. Note the relatively similar populations of New York and New Delhi, and Tokyo and Dhaka, and the manifold difference in their sizes.  

This blog has several other interesting similar graphics. 

Westward shift in US population center of gravity

Interactive graphics can convey complex issues in a cognitively striking manner. Economix points to a US Census Bureau interactive map showing the shifting center of the country's population - defined as "the place where an imaginary, flat, weightless and rigid map of the United States would balance perfectly if all residents were of identical weight".



(click this for full image)

Like in the US, India's decennial census figures too are out now. Since census figures are a wealth of statistical information, its utility lies in the ease with which potential users can extract (it baffles me as to why GoI Departments do not provide for downloading their data in atleast Excel format) and render this data. Compare the respective efforts of the Census Commissionerates from the United States and India in this regard. The Census Commissionerate could take a leaf out of this when presenting its final 2011 census data.

Television, late marriages and population control

The Union Health and Family Welfare Minister in India, Mr Ghulam Nabi Azad kicked off a storm recently when he suggested late marriages and electrification of villages as solutions to the problem of population growth. Mr Azad felt that late marriages would lower the fertility levels among couples and providing electricity to villages would get people to watch more late-night television and thereby keep them away from procreation. Critics accused him of treading on the personal and cultural sensitivities of people and trivializing a complex problem. But he is right on both counts and deserves to be complimented.

A study commissioned by the USAID which examined the ages of child bearing across India in 2005-06, found that
1. Women marrying late have a shorter first birth interval than women marrying at a younger age.
2. Second and higher birth intervals are longer among those marrying late compared with those marrying early.

Since most marriages take place at a very young age, it concludes that efforts to promote late marriage could lead to a reduction in fertility and improve child and maternal health. Evidence from across the world too points to much the same conclusions. In fact, among all the countries, India has one of the lowest average marriage age for women in the world, at 19.3 years (only Chad, Mozambique, Niger, Nepal and Bangladesh are below).

A BREAD working paper by Eliana La Ferrara, Alberto Chong, and Suzanne Duryea examined the impact of soap operas in Brazil (which depict smaller families) on fertility trends by controlling for other factors, and found striking positive trends. They use census data for the period 1970-91 and the presence of signals of Rede Globo, the network that has an effective monopoly on novelas (or soaps), and find that "women living in areas covered by the Globo signal have significantly lower fertility. The effect is strongest for women of lower socioeconomic status and for women in the central and late phases of their fertility cycle, consistent with stopping behavior."

If these aforementioned studies carry any significance, then apart from the conventional approaches to lowering population, the government should be considering solutions that address these issues. It should be promoting late marriages by providing incentives for children's education and tax concessions, encouraging tertiary education for women, and so on. And even the much derided, populist measures of some of the political parties to provide television sets and cable connections, may after all not be as bad as originally thought!