America's not the only country with a middle class problem.But where America's middle may be shrinking, India's is growing by leaps andbounds, even as politicians wrangle over the different ways they may or may notbe getting squeezed.
Proponents of foreign investment in retail say allowingWalmart and others to own 51 percent of domestic retail outlets will bring inbillions of dollars in much-needed foreign exchange, helping to shore up therupee. And they say the new stores and associated businesses (trucking,canneries, etc) will generate some 10 million quality jobs -- meaning formalsector jobs that pay the mandated minimum wage, at least.
On the other hand, critics worry that Walmart and otherswith massive buying power will create monopoly-like conditions for Indianfarmers, and that predatory pricing will drive millions of mom-and-pop storesout of business (as happened in the US). The result being, as economist JayatiGhosh has argued, a single Walmart store will result in a net loss of 1400 jobs.
None of this matters one iota to the country's 400 millionpoor people (or to the ultra rich). Sothe sturm and drang in the media, and the posturing among the politicians,actually reflects a new political role for India's growing middle class --which has always in the past been viewed as politically irrelevant due to theirsmall numbers and general apathy.
“Without saying so explicitly, all of a sudden the middleclass is very important to the political parties,” Padmanabhan a journalistwith a business newspaper writes.
“As a chattering class they always influenced public opinionand thereby weighed in indirectly on electoral outcomes. They continue tomutter about daily economic atrocities, but what has changed is their constructand spread. Earlier, it was mostly confined to the top metros or towns”whichaccount for limited seats in Parliament”and were dominated by the salariedclass.”
“But all this has been changing for the last three decadesas the economy first and aspirations later have taken flight. Like an incomingtide, till it is upon you, one rarely realizes the altered circumstance. Thefirst flush of data released by the 2011 Census reveals that the urban areasnow account for 31.16% of the population; it was 23.34% in 1981”the biggest jumpcoming in the last decade. This has been accompanied by a visible improvementin material circumstances (quality of transport, mobile phones and so on) ofthe populace.”
“The growth in the number of towns in the last decadespurted by over 50%. In some states such as Kerala, the rate of growth ofurbanization grew from 26% in the decade ended 2001 to 47.7% in 2011. To besure, this includes census towns, large villages that mimic the demographiccharacteristics of a town, as opposed to statutory towns that have a municipaladministration. The data reveals, as reported earlier in a business newspaper,that between the 2001 and 2011 censuses, the number of statutory towns rose by242 to 4,041, while census towns almost trebled to 3,894. This distinction basedon definition is unimportant.”
“Instead, what matters is that the middle class has spreadits wings in an unprecedented manner. What bind this heterogeneous lot areaspirations. Their presence in census towns could potentially redefineconventional rural voting patterns. Especially since the lower middle class,which has defined the expansion of the middle class, always votes; somethingthat may be crucial in the general election of 2014. It pays, therefore, forparties to position oneself as their vanguard through such symbolic fights overpolicy change while continuing to sing paens for the aam admi (common man). Inpolitics, it is not what you are doing that is important, but what you are seento be doing.”
And that means the “debates” between Manmohan Singh,Narendra Modi and Mamata Banerjee will increasingly start to sound like the sparringbetween Mitt Romney and Barack Obama.
