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The great Indian middle class and its consumption levels

22-January-2005
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The great Indian middle class and its consumption levels

Total personal consumption expenditure over 1999-2000 stood at Rs 7,20,932 crore, according to the 55th round of the National Sample Survey. Of this Rs 1,25,217 crore (17 per cent of the total) was accounted for by 62 million people belonging to the `upper middle class' (6 per cent of the total population). A sum of Rs 1,77,137 crore (25 per cent of total consumption) was consumed by 179 million people belonging to the `lower middle class' (17 per cent of the total population).

The 241 million people belonging to the middle class as a whole (23 per cent of total population) accounted for Rs 3,02,534 crore of total consumption (42 per cent). If you wanted to find this great Indian middle class market, with annual per capita consumption of, say, Rs 8,000 or more where would you look? The table tells you where.

The average middle class consumption per capita per year works out to Rs 12,546. A little more than 40 per cent of the total consumption of this class is accounted for by the top one third; the `upper middle class', which enjoys an average consumption of Rs 20,196 per capita per year, more than twice as much as the Rs 9,896 average for the `lower middle class'.

The middle class population in 1999-2000 was only slightly smaller than the country's total urban population according to the 2001 Census (286.12 million). However, towns and cities accounted for only a little more than half of `the great Indian middle class', 53 million persons in the top 20 per cent of the urban population, ranked according to consumption levels (urbantop20) and another 75 million people belonging to the 40 per cent of the urban population that lies between the top 20 per cent and the poorest 40 per cent of the urban population (urbanMID40). 98 million people were accounted for by the ruraltop20, i.e., the top 20 per cent of the rural population ranked according to levels of consumption.

Interestingly, the turalmid40 groups in Kerala, Punjab and Haryana also made it into the list of the great Indian middle classes, though, together, they accounted for only about 18 million people.

Totally, there were 128.3 million urbanites in the great Indian middle class, with average consumption levels of Rs 14,513 per capita per annum.

Villagers accounted for the remaining 112.8 million, with consumption levels averaging Rs 10,309 per capita per annum.

In the event, villages accounted for 40 per cent of the total consumption expenditure of the great Indian middle class.

However, in per capita terms, the consumption expenditure of the urban section of the middle class was 40 per cent above that of its rural counterpart.

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