[kiku007]

Originally Posted by RaghavEvoX

GDP is a very misleading term to compare economies.

A good comparison would be GDP per capita with respect to the cost of living index.
Or else GDP Per capita (which is excluding the top 100 people contributing to the GDP).
That will give a real indication of where we stand.

The GDP figure by itself does have its limitations on how it can be used. It gets ridiculous when people celebrate India’s GDP crossing that of the United Kingdom.

The following article does give some insights about the per capita income rise after factoring inflation. Context is very important in these things.

Source: https://www.business-standard.com/ar...0500385_1.html

India's per capita income in nominal terms doubled to Rs 1,72,000 since 2014-15 when the Narendra Modi-led NDA came to power but uneven income distribution remains a challenge.

As per the National Statistical Office (NSO), the annual per capita (net national income) at current prices is estimated at Rs 1,72,000 in 2022-23, up from Rs 86,647 in 2014-15, suggesting an increase of about 99 per cent.

In real terms (constant prices), the per capita income has increased by about 35 per cent from Rs 72,805 in 2014-15 to Rs 98,118 in 2022-23.

"You are looking at GDP in current prices, but if you account for inflation, the increase is much less," said noted development economist Jayati Ghosh on doubling of per capita income in nominal terms.

She further said distribution is critical.

"Most of this increase has accrued to the top 10 per cent of the population. By contrast, median wages are falling, and possibly even lower in real terms," said the former JNU professor.

[am1m]

A couple of pages back, the discussion went around to how the socioeconomic segment that most of us on this forum probably belong to is no longer the middle class. Most of us probably aren't in the big leagues either. So what are we?

Remember reading an article a long time ago that I found very revealing. So went back and dug it out and read it again:

https://www.theatlantic.com/magazine...ocracy/559130/

It's very US-centric/specific, some of it doesn't apply. But I think a lot of it does.

A lot of people are going to dismiss it as borderline "socialist/liberal/woke/urban naxal" thinking. But personally, it gave me a deeper understanding (eye-opening even) of some of my attitudes and beliefs about money.

Some excerpts:

"In between the top 0.1 percent and the bottom 90 percent is a group that has been doing just fine. It has held on to its share of a growing pie decade after decade. And as a group, it owns substantially more wealth than do the other two combined. In the tale of three classes (see Figure 1), it is represented by the gold line floating high and steady while the other two duke it out. You’ll find the new aristocracy there. We are the 9.9 percent."

"So what kind of characters are we, the 9.9 percent? We are mostly not like those flamboyant political manipulators from the 0.1 percent. We’re a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, M.B.A.s with opaque job titles, and assorted other professionals—the kind of people you might invite to dinner. In fact, we’re so self-effacing, we deny our own existence. We keep insisting that we’re “middle class.”"

"One of the hazards of life in the 9.9 percent is that our necks get stuck in the upward position. We gaze upon the 0.1 percent with a mixture of awe, envy, and eagerness to obey."

"We are the staff that runs the machine that funnels resources from the 90 percent to the 0.1 percent. "

[Jeroen]

This middleclass debate is a tricky one, in many countries and certainly in India.

I have recently finished reading “whole numbers and half truths” by Rukmini S.

Fascinating read!

It has a chapter called: “how much money do Indians make”.
She explains in length why the whole debate is also very much hampered by lack of good data and definition. E.g. how do you measure income. As only a small percentage of Indians pay income tax. She also states that India does not offially collect data on income.

But there is data on household spending.

A few sobering statistics perhaps:

Average Indian spends a little under Rs2500 per month, average
Anyone in urban India who spends more that Rs8500/months would be in the top 5% of the country (these are numbers pre-dating pandamic.

She also explains in detail that what accounts for Indian middle class is very different from more Western countries middle class. (taking into account things such as indoors piped water, households with at least 18 hours electricity/day, households with flush toilets etc..

Nancy Birdall (economist) has suggested that middle class in developing countries could include people with an income above $10/day, excluding the top 5 percent of that country.

As she points out, by that definition, India has no real middle class. Everyone at over $10/dya is in the top 5% of the country.

I got the recommendation for this book on TeamBHP. But the author also mentions “if you are reading this book it is very unlikely you are part of the middle class”.

All these debates about numbers and comparisons and definitions is of course relevant. But it is probably more relevant to try and put these sort of discussion in context of how various groups of people lead their life. How difficult, easy, do they have it. What uncertainties do they have, life expectancy, infant death rates etc.

In order to really understand where each of us fits into the greater scheme, you really need to look beyond mere statistics and numbers and look at how people around you lead their actual lives.

Jeroen

[congruent.cars]

Originally Posted by Jeroen

This middleclass debate is a tricky one, in many countries and certainly in India.

Agree. It's a tricky one because there is no official, objective threshold or range to qualify a person or household as middle class. I believe there is a poverty line definition by the Government and so it's kind of clear there, but no such thing for the middle class. It's a different thing that the poverty line definition itself is challenged and probably dated.

So how do you know if someone is middle class? A stand-up comedian said- 'They would proudly announce it themselves!' Given the slightest opportunity in conversations, people jump and self-claim 'Hum to middle class hai ji' or 'Hum thehre middle class log'.

Hence middle class is more of a mindset. My own definition of the middle class, based on experiences and observations, is something like this. I tick all these boxes:

01. When you consistently buy 2 (or more) levels below your actual level of comfortable affordability. This is driven by guilt to indulge and also the fear of saving up for that rainy day, which more often than not would never happen

02. When you are convinced, based on a pragmatic evaluation of your current life situation, that you won't make it to the next orbit. Of course, everyone's next orbit differs, but then that's why it's a mindset

03. If you are not a vote bank for the politicians in elections and thus even too many of your kind would not swing the outcome of an election

[Lobogris]

Originally Posted by carboy

GDP doubling is not the same as GDP per capita doubling. Growth in population helps GDP growth, but has no effect on GDP per capita growth.

In the 7 years before COVID, our GDP per capita didn't even come close to doubling. It didn't even increase by 50% in those 7 years.

That’s why I provided a buffer. I didn’t predict a level of exactly double which would be 5k. I stated 4k. In addition, the main reason for slow growth was the fall in Indian Rupee against the $ from around 45 to the current 82. So that took away almost all the increase. Disastrous policies like demonetisation also slowed Indian down for a few years. Many other ill advised polices had an impact as well.

[madrasmandayan]

Courtesy: https://twitter.com/PankajPachauri/s...372681728?s=20

[Samurai]

I am surprised nobody brought up Peter Zeihan so far.

https://www.youtube.com/watch?v=uBVOVSxKEYs

[Samurai]

A Pakistani American Economist visits India to check out his ancestral village deep in Gujarat, finds India's progress astounding...

Jump directly to 56:00 position.

https://www.youtube.com/watch?v=52Qhy1pxqeo&t=3359s

[thanixravindran]

If Satya Nadella can talk about growing up in Indian middle class, whose father is a IAS and Secretary in State and Union Government in 80s, why can't present day car and home owning IT folks claim to be 'middle' class

https://www.ndtv.com/feature/microso...enging-3849848

And yes, Indian middle class had access to computers in late 80s.

[m8002?]

Here is a related article on how much to earn to be qualified as top 1% in different countries

https://www.financialexpress.com/lif.../3002981/lite/

[Turbohead]

Originally Posted by m8002?

Here is a related article on how much to earn to be qualified as top 1% in different countries

https://www.financialexpress.com/lif.../3002981/lite/

Am I missing something?

While $77k would most certainly be seperating the top 1% of earners in our country, why is that article converting that into PPP equivalent of India (₹16 lakhs) instead of the literal amount in rupees (approx ₹60 lakhs)?

The PPP equivalent amount of other countries make sense though and will enable one to compare with our currency.

[Samurai]

Originally Posted by thanixravindran

And yes, Indian middle class had access to computers in late 80s.

As someone who started learning computers in the late 80s, I must qualify this statement.

Yes, there was access. But not as home PC. I recall that a home PC cost same as my father's annual salary at that time. It was unthinkable to buy unless one was rich.

The only way a middle class person that time could access computers was by joining a computer class at NIIT or such institute or by joining comp.sci engineering. I joined a computer class to learn C, that is how I got my access.

[guru_max]

Originally Posted by Samurai

A Pakistani American Economist visits India to check out his ancestral village deep in Gujarat, finds India's progress astounding...

Jump directly to 56:00 position.

https://www.Youtube.com/watch?v=52Qhy1pxqeo&t=3359s

Our subcontinent is so unique and people from other parts of the world perhaps does not understand the way we work over here. This pakistani is so awed because he understands these nuances. Inspite of all the problems , we have been eternally optimistic. We indeed have come a long way since the colonial era. Also, in the past few years there's a sense of positivity and optimism ( this is strictly politics though). But the question is whether there's any strong foundation to support this positivity. The biggest problem facing us is the job situation for undereducated folks. It is also so skewed geographically, creating mini crises within the country every few years( think of the great migration of workers post pandemic). Whoever solves this problem will fix the country for good. I believe the rest of the issues in the country will fix itself.

[Jeroen]

Originally Posted by Samurai

As someone who started learning computers in the late 80s, I must qualify this statement.

Yes, there was access. But not as home PC. I recall that a home PC cost same as my father's annual salary at that time. It was unthinkable to buy unless one was rich.

The only way a middle class person that time could access computers was by joining a computer class at NIIT or such institute or by joining comp.sci engineering. I joined a computer class to learn C, that is how I got my access.

I can’t speak for India obviously, but I can vouch for the situation in the Netherlands, which was ahead of most European countries at the time.

During the 80s virtually nobody had a home PC. And if you worked with computers at your place of work it was most likely on a terminal hooked up to a DEC system or similar. I did not get my own desk PC at work until end of 80s. And I was working in industrial automation. We used to automated factories and preproduction lines. We even ran some of those systems on Very heavy duty and expensive desktop PCs. But it was several years before we switched from our DeC 1144 to desktop PC For each employee.

I was very much an early adapter, and I bought my first home desk top in the mid 90’s! It was a real Gateway. That brand doesn’t exist anymore but I had several.

When I joined Ericsson in 1993, it was a similar story. Essentially terminals, not computers. Only several years later we switched to desk tops. It would take another decade, so we’ll into 2000 before we switched to laptops. Initially, only for people who had to be mobile, (eg sales and service folks). Of course, these days everybody has a laptop. I did not trade our home desk top for a MacBook till 2009.

So yes, there were computers in the west in the 80s, but very limited and certainly not very often at home in a private setting.

Jeroen

[am1m]

Originally Posted by Samurai

I recall that a home PC cost same as my father's annual salary at that time. It was unthinkable to buy unless one was rich.

Absolutely! There was no way the actual middle-class had access to computers in the 80s. If we're talking about the socioeconomic segments above that (but who keep calling ourselves 'middle-class'), even then it was not really access.

I remember 2 friends from definitely rich business families who actually had computers at home in the early 90s. Their families had a separate air-conditioned room for the machines, we had to remove our shoes and enter! Even at school, we had to remove our shoes before entering the hallowed 'computer lab'. (Grinning now when I think about the much more advanced MacBooks and iPhones I see strewn around carelessly in hostels these days!)