ADB Reports Pakistan's Middle Class Larger Than India's

[Guynextdoor]

Mr. riaz haq. Dude. Is this you???

 

[Guynextdoor]

You seem to have trouble with reading comprehension. Once again, this discussion is about the present, not future projections.

When you get there, then you can talk but, as of now, India is on par with Pakistan on per-capita economic indicators. You are not comparable to China, let alone the West.

Oh I'm sorry. I just know of countrys who plan, target and execute. And since in your mind there doesn't seem to be a difference between two countries at the same level (as you say), one of which grows at 4% and another at 9%, I'm sure you have some insight others don't. Very little possibility we won't make the league, very little possibility you will.

 

[RiazHaq]

Not only is India's middle class very small, vast majority of its members sit on the hairy of edge of just $2 a day, and quite vulnerable to any shocks.

On UNDP education index, Pakistan scores low at 0.665 and ranks 137, but it is still ahead of India's score of 0.638 and ranking of 142nd on a list of 176 nations.

Average number of years of schooling in Pakistan is 13 years, 3 years more than India's 10, according to this index as referenced in the Newsweek cover story on 100 Best Countries.

An average Pakistani is, therefore, better educated and more capable of earning higher income than an average Indian.

Interactive Infographic of the World's Best Countries - Newsweek

 

[Trisonics]

Not only is India's middle class very small, vast majority of its members sit on the hairy of edge of just $2 a day, and quite vulnerable to any shocks.

again, I do not understand how you term the Indian middle class as "very very small" ..care to explain?

Im using the same source ..what makes you think the large population of middle class Pakistan are not sitting on the $2-$4 a day?? Infact its 82% for Pak and 81% for India

 

[Bhim]

Actually RH reasoning is not with out any substance--


NEW DELHI: Despite its shaky empirical foundations, the myth of the Great Indian Middle Class persists. A new Asian Development Bank report lauds the rise of the Indian Middle Class and projects it as the engine of global growth. However, according to the definition used in the report itself, the vast majority of this middle class earns between Rs 1,000 and Rs 2,000 per person per month. Only 0.0009% of Indians earn more than Rs 10,000 per month. Didn't understandThe ADB’s Key Indicators for Asia and the Pacific 2010 report released this week has a special chapter on the Rise of Asia’s Middle Classes. Projecting that the Asian middle class will dominate the next two decades (including crossing a billion in India alone by 2030), the report says that Asia’s emerging consumers are likely to assume the traditional role of the US and European middle classes as global consumers, and to play a key role in rebalancing the world’s economy.

However, the definitions used to arrive at such conclusions scarcely fit with the traditional definition of the middle class, as those who have not inherited wealth, hold regular jobs and enjoy a degree of financial security that allows them to consume and save and support the maintenance of law and order. The ADB report defines the middle class as those earning between $2 and $20 per person per day, measured in international dollars, ie adjusted for purchasing power parity. The ADB does add further nuance by splitting the middle class into three sub-sections: lower middle class ($2 - $4), middle middle ($4 - $10) and upper middle ($10 - $20).

The vast majority of the Indian middle class 82% of it, or 224 million people - however, fit into the first category. Since $1 PPP is Rs 17.256, this means that the vast majority of the Indian middle class earns between Rs 1035 and Rs 2070.

The ADB report shows that middle-class Indians systematically define themselves as poorer than they actually are in surveys. Even by this fairly stingy definition, in all of developing Asia, only Uzbekistan, Lao, Nepal and Bangladesh have a middle class that is a smaller proportion of the total population than in India. China’s middle class is 63% of its population, Sri Lanka’s 59% and Pakistan’s 40%.

Most of India?s 'middle class' earns between 1K and 2K - India - The Times of India

 

[Bhim]

India's middle class population, which will exceed 600 million by 2030, will be a major driving force in global consumption by then, next only to China, says a report by the Asian Development Bank (ADB).

Asian consumers are likely to spend $ 32 trillion by 2030, accounting for 43 per cent of total global consumption, in which India and China will have major shares, ADB said in a special chapter titled Rise of Asia's Middle Class.

"The surge in numbers of middle class people in India has seen additional annual sector spending of $ 256 million and spawned low-cost, locally-produced products and services such as Tata Motor's $ 2,200 Nano car, the Godrej Group's $ 70 batteryoperated refrigerator, and cheap mobile phone rates," the report titled Key Indicators for Asia and the Pacific 2010 says.

The emergence of a substantial middle class in India has created new avenues for employment and entrepreneurship, and a louder voice for improved public infrastructure and services.

India's middle class-defined as those able to spend between $ 2 and $ 20 a day-has expanded to about 420 million, according to an ADB report on Asia's middle class.

However, this growth and employment driver are also most vulnerable to economic shocks.

The people in the vulnerable lower middle class category number about 244 million.
India also has approximately 26 million affluent people, those who can spend more than $ 20 a day.
"Policies that bolster the middle class may have benefits not only for economic growth, but may be more cost-effective at long-term poverty reduction than policies that focus solely on the poor," said Jong-Wha Lee, chief economist, ADB. " More than 75 per cent of the country's middle class remain in the $ 2 to $ 4 daily consumption bracket, the lower end of a range of $ 2 to $ 20, leaving them at risk of falling back into poverty in the event of a major economic shock, such as the global financial crisis," the report adds.

Infrastructure constraints, like unreliable power supplies may also hamper consumption of durable goods.

The report suggests that to help unlock the full potential of the Indian middle class as consumers and drivers of growth, the government must continue to remove structural and policy impediments to the segment's development and improve income distribution.
"Actions should include infrastructure improvements and social safety nets that encourage spending, while providing a buffer during hard times. The government should also put in place policies that stimulate the creation of stable, well-paid jobs, and encourage entrepreneurship and education," the report says.


Indian middle class to shine worldwide: Business : India Today

 

[Bhim]

Growing middle class
Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr. Ishrat Husain, Ex-Governor (2 December 1999 - 1 December 2005) of the State Bank of Pakistan.[31] It is a figure that correlates with research by Standard Chartered Bank which estimates that Pakistan possesses a "a middle class of 30 million people that Standard Chartered estimates now earn an average of about $10,000 a year."[32] Latest figures put Pakistan's Middle Class at 35 million strong.[33] In addition, Pakistan has a growing upper & upper middle class, which was estimated at 6.8 million in 2002[34] and has now grown to 17 million people as of 2010, with relatively high per capita incomes.[35]

On measures of income inequality, the country ranks slightly better than the median. In late 2006, the Central Board of Revenue estimated that there were almost 2.8 million income-tax payers in the country.[36]

Poverty levels have decreased by 10% since 2001 [37] Foreign Companies which provide for Pakistani middle classes have been very successful. For example, demand for Uniliver products have recently been so high that even after doubling production the Anglo-Dutch company struggled to meet demand and it's Chairman stated "Pakistanis can’t seem to have enough".[33]




The economy today
Due to inflation and economic crisis worldwide, Pakistan's economy reached a state of Balance of Payment crisis. "The International Monetary Fund bailed out Pakistan in November 2008 to avert a balance of payments crisis and in July last year increased the loan to $11.3 billion from an initial $7.6 billion."[25]

By October 2007, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. Exceptional policies kept Pakistan's trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.

The centaurs building.Since the beginning of 2008, Pakistan's economic outlook has taken stagnation. Security concerns stemming from the nation's role in the War on Terror have created great instability and led to a decline in FDI from a height of approximately $8 bn to $3.5bn for the current fiscal year. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf. Combined with high global commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek external funding as Balance of Payments support. Consequently, S&P lowered Pakistan’s foreign currency debt rating to CCC-plus from B, just several notches above a level that would indicate default. Pakistan’s local currency debt rating was lowered to B-minus from BB-minus. Credit agency Moody’s Investors Service cut its outlook on Pakistan’s debt to negative from stable due to political uncertainty, though it maintained the country’s rating at B2.The cost of protection against a default in Pakistan’s sovereign debt trades at 1,800 basis points, according to its five year credit default swap, a level that indicates investors believe the country is already in or will soon be in default.

The middle term however may be less turbulent, depending on the political environment. The EIU estimates that inflation should drop back to single digits in 2010, and that growth should pick up to over 5% per annum by 2011. Although less than the previous 5 year average of 7%, it would represent a overcoming of the present crisis wherein growth is a mere 3.5-4%.[26]


Economy of Pakistan - Wikipedia, the free encyclopedia

 

[Trisonics]

Actually RH reasoning is not with out any substance--


NEW DELHI: Despite its shaky empirical foundations, the myth of the Great Indian Middle Class persists. A new Asian Development Bank report lauds the rise of the Indian Middle Class and projects it as the engine of global growth. However, according to the definition used in the report itself, the vast majority of this middle class earns between Rs 1,000 and Rs 2,000 per person per month. Only 0.0009% of Indians earn more than Rs 10,000 per month. Didn't understandThe ADB’s Key Indicators for Asia and the Pacific 2010 report released this week has a special chapter on the Rise of Asia’s Middle Classes. Projecting that the Asian middle class will dominate the next two decades (including crossing a billion in India alone by 2030), the report says that Asia’s emerging consumers are likely to assume the traditional role of the US and European middle classes as global consumers, and to play a key role in rebalancing the world’s economy.

However, the definitions used to arrive at such conclusions scarcely fit with the traditional definition of the middle class, as those who have not inherited wealth, hold regular jobs and enjoy a degree of financial security that allows them to consume and save and support the maintenance of law and order. The ADB report defines the middle class as those earning between $2 and $20 per person per day, measured in international dollars, ie adjusted for purchasing power parity. The ADB does add further nuance by splitting the middle class into three sub-sections: lower middle class ($2 - $4), middle middle ($4 - $10) and upper middle ($10 - $20).

The vast majority of the Indian middle class 82% of it, or 224 million people - however, fit into the first category. Since $1 PPP is Rs 17.256, this means that the vast majority of the Indian middle class earns between Rs 1035 and Rs 2070.

The ADB report shows that middle-class Indians systematically define themselves as poorer than they actually are in surveys. Even by this fairly stingy definition, in all of developing Asia, only Uzbekistan, Lao, Nepal and Bangladesh have a middle class that is a smaller proportion of the total population than in India. China’s middle class is 63% of its population, Sri Lanka’s 59% and Pakistan’s 40%.

Most of India?s 'middle class' earns between 1K and 2K - India - The Times of India

This is true for Pakistan also!

The absolute numbers do make a significant difference. For the curious, please do read

http://www.mckinsey.com/mgi/publications/india_consumer_market/index.asp

Much has been written about the evolution of India's market over the near term, but there has been less discussion of the true long-term potential of India's consumer market. MGI seeks to understand how fundamental forces of long-term economic growth such as demographics, urbanization, and rising education levels will affect growth in Indian incomes, and how this increased spending power will, in turn, translate into household consumption. MGI examines how Indian consumers will segment by income brackets, how much spending power they will have, what these different groups of consumers will buy, and how the picture will vary between urban and rural India.

MGI's analysis shows that if India continues on its current high-growth path, over the next two decades the Indian market will undergo a major transformation. Income levels will almost triple, and India will climb from its position as the twelfth-largest consumer market today to become the world's fifth-largest consumer market by 2025.

As Indian incomes rise, the shape of the country's income pyramid will also change dramatically. Over 291 million people will move from desperate poverty to a more sustainable life, and India's middle class will swell by more than ten times from its current size of 50 million to 583 million people. By 2025 over 23 million Indians—more than the population of Australia today—will number among the country's wealthiest citizens

The geographic pattern of India’s income and consumption growth will shift too. By 2025 the Indian consumer market will largely be an urban story, with 62 percent of consumption in urban areas versus 42 percent today. While much of this new wealth and consumption will be created in urban areas, rural households will benefit, with annual real rural income growth per household accelerating from 2.8 percent over the past two decades to 3.6 percent over the next two.

Indian spending patterns will also evolve, with basic necessities such as food and apparel declining in relative importance and categories such as communications and health care growing rapidly.
The upcoming changes in the Indian consumer market will create major opportunities and challenges for Indian and multinational companies alike. Businesses that can meet the needs of India's aspiring middle class, keep price points low to reflect the realities of Indian incomes, build brand loyalty in new consumers, and adapt to a fast changing market environment will find substantial rewards in India's rapidly growing consumer market. Likewise, India's policymakers will be challenged to keep India on the path of economic reform while addressing major challenges in infrastructure and social investment. The rewards, however, will be substantial progress in poverty reduction and a rising standard of living for much of India's population.

 

[Bhim]

@ Trisonics, I merely copy pasted an articlr from TOI, as usual the full version was not released by them.

But I am getting more information on the study by ADB.
Cheers

 

[Hulk]

Two days gone I am still waiting for answer to my question, how did ADB got data about India when no agency including government has the right data? Riaz never replied to this question, since his analysis is purely report based and does not have any idea on ground.
So analysis done on incorrect data has no meaning.
Even after 20 good years the data has not changed much because we still do not report correct figures.

In all my post I only doubted data about India, I never spoke about Pakistan nor I pasted any link like others. The reason is I do not believe in doing analysis purely on basis of internet data having no idea on ground.
This is second thread that Riaz run away from answering my questions, he can only talk about reports that is all he knows ask question based on reality and he will never answer.

 

[RiazHaq]

Recently released independent film "Peepli Live" highlights the problem of farmers' suicides in India--some 200,000 of them have taken their own lives in the last ten years. But it does more than just satirize this unfolding tragedy; it also demolishes the carefully crafted image of "Peaceful, Stable and Prosperous India" that has been widely promoted in the Western media by the likes of the CNN show host Fareed Zakaria through his TV show and his book "The Post-American World".

Haq's Musings: "Peepli Live" Destroys Indian Myths

 

[karan.1970]

Here are the rankings for India and Pakistan:

India...Pakistan

88........86........Education

82........85.......Health

87........85.......Quality of Life

38........62.....Economic Dynamism

48........99.......Political Env.

78........89.......Overall

Pakistan is ahead of India in education and quality of life, as judged by Newsweek.

Obviously, Newsweek rankers have a bias for democracy, no mater how flawed, that puts India significantly ahead of Pakistan in political environment and helps its overall ranking. And the fact that Pakistan has been hugely demonized by the western media has also hurt its standing.

But the killers for Pakistan rankings are its corrupt and incompetent politicians and the economic ruin they have wrought over the last two years.

Why do you think of the bold part above? Has Pakistan been taken over by a dictatorship while I was sleeping last night? Because when I went to bed, Pakistan was a democracy as well?

 

[muse]

I hope this thread will once again allow our forum moderators to rethink the role of some Indian posters -- their entire outlook seems to be not to discuss but rather to berate and denigrate, even if the information presented is information from an international fincnacial and development institution - it's regrettable but this behaviour will only change once our Mods realize that there is a difference between a mulitplicity of views and a organized effort to prevent the discussion by some of our indian forum members - these members will be better served and the forum better served if they can have a seperate area where they can indulge their ideology.

 

[sssss]

I hope this thread will once again allow our forum moderators to rethink the role of some Indian posters -- their entire outlook seems to be not to discuss but rather to berate and denigrate, even if the information presented is information from an international fincnacial and development institution - it's regrettable but this behaviour will only change once our Mods realize that there is a difference between a mulitplicity of views and a organized effort to prevent the discussion by some of our indian forum members - these members will be better served and the forum better served if they can have a seperate area where they can indulge their ideology.

I think,you ll soon learn that you are a member with a dignified rank,i.e Think Tank and hopefully not a flamer,cuz pointing out exclusively towards Indian members doesn't make sense,Pakistani members stick bang on the topic?
*What about those who bring poverty into the discussion?*

 

[SMC]

I hope this thread will once again allow our forum moderators to rethink the role of some Indian posters -- their entire outlook seems to be not to discuss but rather to berate and denigrate, even if the information presented is information from an international fincnacial and development institution - it's regrettable but this behaviour will only change once our Mods realize that there is a difference between a mulitplicity of views and a organized effort to prevent the discussion by some of our indian forum members - these members will be better served and the forum better served if they can have a seperate area where they can indulge their ideology.

I think this is a really good point. Time and time again, Indian members troll on topics which they don't like. Whether it be topics on the not so pretty side of India, or what they consider conspiracy theories, etc. They basically use intimidation and mass numbers techniques to shut down the opposition.