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Indianmiddleclassis24million,not264

million:CreditSuisse
TheCreditSuissereporthasestimatedthemiddleclassonthebasisoftheirwealthratherthan
theirincome
PrachiSalve|IndiaSpendOctober29,2015LastUpdatedat10:20IST

Indiaaccountsfor3%oftheglobalmiddleclasswith23.6millionpeople.
Ithasthelowestthresholdforapersontobeconsideredmiddleclasswithannualwealthof
$13,662(Rs737,748orRs61,480permonth).
With 23.6 million people, the Indian middle class holds almost a quarter of the countrys
wealthat$780billion(Rs5,070,000crore).
ThesearesomeofthefindingsofCreditSuisse,aglobalfinancialservicesfirmbasedinZurich,from
itsGlobalWealthReport2015.

Thereportestimatedthat664millionadultsbelongedtotheglobalmiddleclassin2015,or14%of
theadultpopulation.Indiahas23.6millionadultswhoqualifiedasmiddleclassin2015.
ThereisnocleardefinitionofmiddleclassinIndia,butthelatestdefinitiondramaticallylowers
thenumberofIndiansconsideredtofallinthatcategory.
AMcKinseyGlobalInstitutestudyin2005usingNationalCouncilofAppliedEconomicResearch
(NCAER)datasaid50millionpeopleweremiddleclass,usingthedefinitionofrealannualhousehold
disposableincomebetweenRs200,000andRs1million.
Attheotherendofthespectrum,astudybytheWorldBankin2005estimatedthemiddleclassat264
million,usingthemedianpovertylinein70countriesatthelowerextreme($2perday)andthe
UnitedStatespovertyline($13perday)asanupperextreme.
Anothermethod,usedbytelevisionchannelCNNIBNinitsmiddleclasssurveyin2007,utilised
consumptionbasedhouseholdcriteria:Carorscooter,colourtelevision,ortelephone.Itestimatedthat
themiddleclasswasapproximately20%ofthepopulationorslightlyover200millionpeople.
Middleclassmeasuredbywealthnotincome
TheCreditSuissereporthasestimatedthemiddleclassonthebasisoftheirwealthratherthantheir
income.
Anincomebaseddefinitionofthemiddleclassmisseselementsoffreedomandsecurity.Itsuggests,
forexample,thataspellofunemploymentcancausemiddleclassstatustoevaporate.Awealthbased
definition,ontheotherhand,conformsbettertothewidespreadviewthatmiddleclassmembershipis
resilienttotemporarysetbacks,thereportsaid.
InIndia,theestimatedvalueofwealthtobeconsideredmiddleclassmustbemorethanorequalto
$13,662(Rs737,748).
ThegrowthofwealthhasbeenthefastestinIndia(secondonlytoChina)over15years(20002015),
evencorrectingforpopulationgrowth.
Yet,morethan90%oftheadultpopulationfallsinthebottomofthewealthpyramid(lessthan
$10,000),indicatingtheunevendistributionofwealthinIndia.
Atthetopofthegloballadder,2%ofhighnetworthindividuals(HNWIs)resideinIndia,Africaor
LatinAmerica.

MiddleClassAcrossBRICSCountries
Middleclasspopulation(inmillion)

%oftheglobalmiddleclasspopulation

108.7

23.6
11.20

China

India

Brazil

4.5

4.3

Russia

SouthAfrica

Source:GlobalWealthReportGetthedata

With108millionpeople,ChinahasthehighestmiddleclasspopulationamongBRICSnationsand
globally,followedbyIndias23.6millionpeopleandBrazils11.2million.
Chinaalsotopstheshareoftheglobalmiddleclasspopulationwith16.4%,followedbyIndiawith
3%.
ThenumberofmiddleclassadultsinChinaincreased38millionbetween2000and2015,andtheir
wealthroseby$5.6trillion,overtakingtheUS,which,thusfar,hadthehighestnumberofmiddle
classadults.
Over15years,6.7millionadultsjoinmiddleclass
Indiaadded6.7millionadultstothemiddleclassoverthese
15years,andmiddleclasswealthroseby$1.2trillion.
OneofthereasonsforthisdifferentexperienceispartlyduetofasteroverallwealthgrowthinChina,
andpartlybecausethepopulousmidportionoftheChinesewealthdistributionismovingintothe
globalmiddleclass,whereasitisstillfarfromdoingsoinIndia,thereportsaid.
Asmanyas11othercountrieshavemorethan10millionmiddleclasscitizens:Japan,62million
France,Italy,Germany,India,SpainandUnitedKingdom,between20millionand30millioneach
andAustralia,Brazil,CanadaandKorea,with10millionto17millioneach.

MiddleClassWealthAcrossTheWorld
Wealthofthemiddleclass(in$billion)
80,706

16,845
754
Brazil

7,342
China

780
India

USA

World

Source:GlobalWealthReportGetthedata

ThemiddleclassinIndiahasa22.6%share($780billionorRs5,070,000crore)ofthecountrys
wealth,whilesectionsabovethemiddleclass(highermiddleclass)shareabout64%ofthewealth.
TheChinesemiddleclasshasanestimatedwealthofabout$16,845billion,whichisa32%shareof
thatcountryswealthand2.9%oftheworldswealth.
TheBrazilianmiddleclassranksthirdamongtheBRICSnations,withatotalwealthof$754billion
31%ofthecountryswealthand0.3%ofglobalwealth.
ShareofmiddleclasswealthfallsgloballyexceptinChina
WealthpermiddleclassadultinIndiahasmorethandoubledfrom$2,040(Rs97,104)in2000to
$5,100(Rs205,020)in2007.
Afterfallingbyabout26%duringthefinancialcrisisof2008,itbouncedto$5,300(Rs241,150)in
2010.Itcontinuedtofallduetoadverseexchangeratesandwasestimatedat$4,352(Rs282,880)in
2015.
Wealthisdominatedbyrealassets,whichaccountforabout86%ofestimatedhouseholdassets.
Theshareofmiddleclasswealthhasfallengloballysince2008,exceptinChina,overtheperiod2000
to2015.

PercentageOfWealthOwnedByMiddleClassAdultsBy
Region,20002015
World

44.5

China
India

22.6
2000

2002

2004

2006

2008

2010

2012

2015

Source:GlobalWealthReportGetthedata

Note:Conversionratesused2000=Rs47.6/$2007=Rs40.2/$2010=Rs45.2/$and2015=Rs65/$