‘Let’s stop pretending India has a huge middle class’—Redditor questions traditional definitions, triggers debate

In a diverse economy like India, the term ‘middle class’ is often used indiscriminately, leading to widespread ambiguity around its true definition. Traditionally, the Indian middle class is often defined by various income thresholds.

For instance, the National Council of Applied Economic Research (NCAER) defines middle-class households as those earning between Rs 5 lakh and Rs 30 lakh per year (around $6,000 to $36,000). But a Redditor has invited attention to the ever-evolving definition of the Indian middle class.

The post reiterates the common notion that individuals earning between 67% to 200% of the median income are classified as middle class in India. “But I am not satisfied with this statement because in India income is not transparent due to unorganised sector and median income is so different in a Tier 1 city and rural areas,” it states.

The Redditor brought attention to the inadequacies of this definition, especially considering the vast disparities in median income between urban centres and rural areas. In major Indian cities, the cost of living is substantially higher, altering the threshold of what might be considered middle class.

Moreover, the unorganised sector, which employs a large portion of India’s workforce, presents additional challenges due to the lack of documented income, making standard economic measures less effective.

To address these discrepancies, a more comprehensive framework has been suggested, which includes three essential criteria for defining the middle class. Firstly, it is important that all basic needs are met, including housing, food, and education.

Secondly, there must be a degree of financial security that enables individuals or families to withstand economic shocks without falling into destitution. This includes having at least six months’ worth of expenses saved and maintaining adequate health and term insurance. Such measures ensure that the middle class can avoid financial ruin in the event of unforeseen circumstances, although it might still result in a decreased quality of life.

Further, disposable income and savings play an integral role in defining the middle class. An individual or household should ideally be able to save at least 20% of their income. Additionally, having 5-10% of income available for discretionary expenses is considered a hallmark of middle-class status. This portion of income allows for non-essential spending, which enhances quality of life and fosters economic stability.

A significant indicator of middle-class status is the ability to afford a small domestic trip once a year, reflecting financial flexibility and leisure spending capability. These factors collectively provide a more nuanced picture of the middle class beyond mere income brackets.

The post concludes that the concept of the middle class cannot be strictly confined to income percentages in India. Consideration of broader economic and social factors, such as financial security, savings, and discretionary spending, is crucial for a more accurate classification.

The post made way for a detailed discussion on Reddit. “Let’s stop pretending India has a huge middle class. It doesn’t. We have a tiny, lucky fraction of people who can afford comfort, and the rest? They’re just trying to survive,” a user concluded.

Another user shared that “the gap between the rich and the poor is widening slowly”. “The middle class is slowly being decimated artificially as a reaction to the actions of the rich. If there’s a very little middle class population, who will consume the products/services created by the rich?” the user said.