From Middle India to the Middle Class of India: Inclusive Growth as the Path to Success
Middle India has been neglected in the last two decades after India’s first wave of economic reforms of the 1990s. If Middle India continues to be left behind, then domestic demand is unlikely to be strong enough to help drive India’s growth acceleration. Middle India is therefore critical to India’s economic takeoff.
Transforming Middle India into the nation’s genuine middle class would fundamentally support the government’s ambitious efforts to increase GDP growth rates to the 8-10% range. With faster growth in household income in Middle India, domestic demand would become stronger more quickly. This in turn would open up new opportunities for more productive business investment targeting the domestic market, including opportunities for small businesses and start-ups. A virtuous circle can then be set in motion.
This report assesses the prospects of transforming Middle India into the middle class of India using detailed household income and expenditure survey data produced by Rama Bijapurkar, Rajesh Shukla, and others in 2014 in the research report Middle India: Key to Inclusive Growth and a Prosperous Future India, published by People Research on India’s Consumer Economy (PRICE).