In 2001, Jim O’Neill, a British economist working with Goldman Sachs, first coined the acronym BRIC to identify the four rapidly growing economies at the heart of the shift in the global economic power – Brazil, Russia, India and China. Pivotal to the growth of these economies was the growing middle-class population in these countries, a segment of people with upward economic mobility, increasing spending power and growing aspirations.
In India, the rise of the middle-class has caught the fancy of economists, educationists, developmental organisations, industrialists and politicians alike. The most common narratives about the middle class continue to be that many of them are young (so provide a large talent pool and workforce), have growing incomes (and significant spending power) and the ability to influence the outcome of economic and political strategies.
Based on economic and social characteristics, Maryam Aslany of King’s College in London estimates that 28% of India’s population can be defined as middle class. A report by the World Economic Forum classifies households as being middle class if their average income is between Rs 2.5 lakh and Rs 27.5 lakh per annum. Using this data, the consulting firm Bain and Co estimated that the Indian middle class will grow to 500 million by 2030. However, with the focus disproportionately falling on India’s middle-class, the phenomenon of inequitable growth is not getting its due attention.
The case of domestic workers
If you hail from a middle-class family in India, you would have grown up being accustomed to having a domestic worker. A domestic worker is both a necessity and a privilege, especially in nuclear families and in families with women engaged in formal employment. It is not surprising then, that in the decade after economic liberalisation, Indian homes witnessed a 120% increase in domestic workers. It is estimated that there are as many as 4 million domestic workers in India, most of whom are women.
However, despite the role that they play in supporting and enabling the growing middle class, very little has been done to protect their interests. Maids, along with other domestic workers such as cooks, gardeners, baby-sitters and chauffeurs among others, are still part of the informal sector that makes up between 85% and 93% of India’s entire workforce.
The domestic worker sector provides employment to a large number of women, several of whom are migrants in search of work, and most of whom have no other skills or means to seek formal employment. But they do not have sufficient job guarantees, social security programmes or labour law protection. Most domestic workers struggle for parity with those in the formal sector for something as basic as days off on weekends and for leave.
These pitfalls in the informal sector are adding to the already growing challenge of inequitable growth in the country. The India Inequality Report published by Oxfam highlights the extreme inequalities. An estimated 77% of our total national wealth is held by just 10% of the rich population. As many as 63 million people are pushed into poverty every year due to rising healthcare costs. It is hardly surprising that India ranked 147th out of 157 countries analysed in the Global Income Inequality Index.
The past few years have been witness first to the celebrations around India’s sustained GDP growth followed by criticism around the credibility of these estimates and lately, the falling growth rate itself. A fact that went largely unnoticed was that India ranked only 62nd out of 74 emerging economies in the World Economic Forum’s 2018 Inclusive Development Index, with 60% of Indians still living on less than $3.20 a day. As many as 163 million Indians do not have access to clean drinking water.
India also continues to rank poorly on the Human Development Index, a statistical tool used to assess a country’s overall achievement on social and economic parameters. On this index, which measures the health of people, their level of educational attainment and their standard of living, India ranked an abysmal 129th out of 189 countries in 2019.
Do we dare celebrate the rise of one spot compared to the ranking of the previous year when 364 million Indians, accounting for 28% of the 1.3 billion people across the world are still multi-dimensionally poor? Can we truly celebrate the fact that the number of billionaires in India went up from nine in 2000 to 119 in 2018 when 400,000 farmers committed suicide in the past 25 years?
Equitable policies
An estimated 3 million Indians are homeless. Of these, the women in particular are vulnerable to unspeakable violence and sexual exploitation. Can we continue to exclude these marginalised and discriminated groups of Indians from our growth story?
These inequalities, several of which are the result of gender and caste, can only be truly eradicated over successive generations. Public policies must be put into place to provide equitable access to education, healthcare, credit, jobs, water, sanitation, housing, public infrastructure and an acceptable standard of living. It may be a good time for governments to start measuring their success not just in terms of GDP growth numbers but by improvement in the standard of living and quality of lives of India’s people.
The onus of social change and equitable progress cannot just be the burden of the government, economic and political machinery alone. The rising civic unrest in response to recent Constitutional changes regarding the citizenship law are an indication of an awakened social conscience. What we truly need is a movement to ensure inclusive growth. One that is not limited to a social media campaign but a mass uprising, one where we strive to ensure that the growth story includes every Indian.
Rohit Shenoy is the head of the Policy School at The Takshashila Institution.