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

[RiazHaq]

Apart from Debt to GDP ratio, a bigger burden on any economy is the debt service cost of the external debt that country has taken. Now as a percentage of govt revenue, Pakistan's Debt service cost is at a whooping 28% as against India's 8%.

An Interesting article in Dawn on the same
http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/business/debt-servicing-claims-$5.6bn-780

Some exerpts from the above

Pakistan paid a staggering $5.6 billion as debt servicing during the last fiscal ended on June 30, which was 43 per cent of the official foreign exchange reserves of the country

This massive payment was possible mainly because of continued higher inflows from IMF, overseas Pakistanis, US aid and loans from other donor agencies.

The higher debt servicing has been a serious problem for the country which used to force governments in Pakistan to get emergency help from the international donors like IMF.

“The only possible way to avoid default like situation in future Pakistan will have to go for rescheduling of loans,” said Atif adding that in this case the loans would be costlier.

The cost of debt servicing changes over time...but it has to be kept a small percentages of GDP. $5.6 billion, if its true, is still less than 3% of GDP which is manageable if the economic growth is sustained.

Meanwhile, expat Pakistanis sent home nearly $9 billion last year...and it's increasing about 10% a year.

What is needed now is to increase exports to the point where the entire balance of payment deficit does not rely not rely on remittances alone.

It is also necessary to collect more tax revenue...which should not be difficult given that it constitutes less than 10% of the GDP today.

 

[SMC]

I see where this is going and muse eluded to it earlier. Diversion tactics at their best. Having quite a bit of experience dealing with Indians on several different forums, this is the most common tactic used when they don't like something.

 

[Hulk]

Dang all this discussion based on data collected by survey where less than 1% would have responded. To add to it lower middle class in India never reveals their real income and playing poor in India is common.

@SMC if you think Pakistan's economy is better than India then I will agree with you, you are way far ahead.

 

[SMC]

Yeah, keep going with diversion tactics.

 

[Hulk]

@SMC yes better than denial mode.

 

[SMC]

If anything, it seems indians are in the denial mode the way they are trying to drag the topic off-topic and bringing in irrelevant points.

 

[RiazHaq]

To bring the discussion back on track, let me quote from The Times of India story on ADB's report:

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.

Most of Indian 'middle class' earns between Rs 1000-2000 - India - The Times of India