Region:
BRICS
Category:
Economy
Article type:
Opinion

Companies in the world pay attention to the growth of the middle class in India

Region:
BRICS
Category:
Economy
Article type:
Opinion
Author/s:
By Veronica Mussio
Publication date:
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Continuing with the current growth of the Indian economy, the average disposable income of households will triple the current in 2025, reaching the equivalent of about 5,277

India is a very interesting to analyze that segment of the population that is exploding case: if it represented only 5% of the population (50 million) in 2005, in 2025 it will become 41% (583 million), according study The golden Bird: The Indian market increased consumption of McKinsey.

According to studies, most middle-class Indians living in big cities, especially New Delhi and Mumbai. But it is assumed that in 2020-2025 there will be an emerging middle class in rural areas.

The definition of Indian middle class, does not resemble anything we can imagine based on the middle class in the United States or Argentina. While there are some points that resemble.

The National Council for Applied Economic Research (NCAER, for its acronym in English) has set a parameter that belong to the middle class households real disposable income of between 200,000 and one million rupees per year (between 3,310 and 16,550 euros).

But defining the middle class just taking an economic parameter, a historically poor country would be incomplete and would not understand cultural issues and changes that have been occurring and will occur for the emergence of this new class. Recall that in India there are castes, very different. The emergence of what would be called middle class in this country, may also have implications for a future system of caste.

An interesting book on the subject is The great Indian middle class, by Pavan K. Varma, India's ambassador to Bhutan.

A group of media as a criterion to refer to people in India who belong to the middle class consumer: having a phone, a car and a motorcycle or television. However, according to others more qualified specialists believe that what most defines this new class is emerging in India "is the attitude." "They are people full of aspirations for a better life, actively consume and have taken the bull by the horns: do not expect the government to solve their problems."

Another feature is the desire to have children well prepared-and speak good English is one of the main features of the Indian middle class: make a great effort to pay them or send them to private schools, boarding schools with excellent educational level.

But what kind of jobs does this emerging class? Or that sectors of the economy are ?. All those in the public sector, as bureaucrats or bankers, belong to the middle class. Others come from the private sector, mainly in the fields of technology, brokerage firms, some small companies and entrepreneurs with its restaurants, travel agencies or textile mills,

Continuing with the current growth of the Indian economy, the average disposable income of households will triple in 2025 (reaching the equivalent of about 5,277 euros in 2025).

Another aspect is the change in consumer habits: less and less percentage of expenditure on items of necessity and increasingly on luxury items, this is a basic tenet of microeconomics, called Engel curve, the higher income, it is shifting consumption basic necessities for luxury goods.

In conclusion, further growth of the Indian middle class and higher income represents an opportunity for companies who want to produce and / or export to India.

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