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Majority of Indian middle class earns between $21-$42 a month
By siliconindia
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Monday, 23 August 2010, 22:45 IST |
27 Comments
1,000 and 2,000 per person per month, while only 0.0009 percent of Indians earn more than 10,000 per month, reveals a new Asian Development Bank (ADB) report. Although the report proclaims the rise of the Indian middle class, projecting it as the engine of global growth, the definition of the same in the report shows a contradictory picture, reports Rukmini Shrinivasan of the Times of India.
The ADB's Key Indicators for Asia and the Pacific 2010 report released this week has projected that the Asian middle class will dominate the next two decades (including crossing a billion in India alone by 2030). According to the report, Asia's emerging consumers are likely to assume the traditional role of the U.S. and European middle classes as global consumers, and to play a key role in rebalancing the world's economy.
Although the report lauds rise of Asian middle class, the definitions used in the report fit with the traditional definition of the middle class. The ADB report defines the middle class as those earning between $2 and $20 per person per day. However, it has divided the middle class into three sub-sections - lower middle class ($2 - $4), middle middle ($4 - $10) and upper middle ($10 - $20).
In terms of Indian middle class, 82 percent of it, or 224 million people come under the first category. Since $1 PPP (purchasing power parity) is 17.256, this means that the vast majority of the Indian middle class earns between 1035 and 2070.
In all of developing Asia, only Uzbekistan, Lao, Nepal and Bangladesh have a middle class that is a smaller proportion of the total population than in India, shows the report.