According toIndia Development Blog, India’s Common People: Who Are They,How Many Are They and How Do They Live?by Arjun Sengupta, K P Kannan, G Raveendran ( March, 15, 2008)is a must read article. According to the authors, there are some caveats: "The need to adopt indicators of deprivation, other than consumer expenditure, is so compelling in the Indian situation that the case for a multidimensional approach is quite strong. In this analysis we have been able to bring in directly only indicators on education, social status and activity status(because these are collected in the employment-unemployment surveys) but these are striking in their association with the incidence of poverty and vulnerability. There are other equally compelling indicators of deprivation such as infant mortality, children under nutrition or anaemia among adult women. Our analysis here starting with consumer expenditure and linking them with social, educational and work status dimensions tell us that there is a strong case for building up a multidimensional profile of poverty, however complex the exercise might be. The idea is not to reduce everything into a single index but to provide a framework for using appropriate indices of deprivation for specific policies and programmes rather than a single measure of poverty for all programmes." They are also other questions like using the official poverty line.
Perhaps, the next quotation gives an indication of their attitude:"The trickle-down effect of growth would be often too meagre and too distant. Market forces almost invariably promote those who have market power and economic growth powered by them often bypasses the poor and the vulnerable who are the overwhelming majority of our people. Ultimately, the success and failure of all our programmes and polices including those for promoting economic growth, will have to be reckoned in terms of how they have fulfilled this basic objective of increasing the welfare of the common people". The'common people' consist of extremely poor, poor, marginal and vulnerable. These consist of people with DPCE (Daily per capita expenditure, 2004-05) of about 9,12, 15, and 20 rupees respectively. These are about 75 percent of the people. Some of their conclusions:
"To sum up, an overwhelming majority of the Indian population, around three quarters, is poor and vulnerable and it is a staggering 836 million as of 2004-05. This includes 70 million or 6.4 per cent who may be characterised as extremely poor with a per capita consumption of less than or three-quarters of the official poverty line. To this should be added 167 million of those who are poor with consumption not more than that fixed as the official poverty line. If this is relaxed to include those with a per capita consumption of up to 25 per cent above the poverty line, called marginally poor here, then we find another 207 million. These three groups account for 444 million or 40.8 per cent of the population. To this we add those with a per capita consumption between 1.25 and two times the poverty line as vulnerable and this group of poor and vulnerable comes to 836 million of Indians or well over 75 per cent of the population.
The next major finding is the close association between poverty and vulnerability with one’s social identity. The two social groups who are at the bottom by this classification are the SCs/STs, who constitute the bottom layer, and the Muslims, who are in the next layer. This does not mean that the other groups are far better off. The next group is the OBCs but better than the two bottom layers. Even for those
who do not belong to any of these groups,the incidence is 55 per cent.
The obverse of this is equally important. It says that in all communities there is a class of better-off, called the middle and high income group, which varies with social identity. Therefore economic differentiation across social groups is a fact of life in contemporary India, albeit in varying degrees.
A much more powerful factor in this differentiation seems to be that of educational endowments. There is no doubt that no or low education is more strongly associated with poverty and vulnerability. But the interesting finding is that for the socially considered lower groups the threshold level of education required to cross poverty
is higher compared to other social groups. What we find here is the close correspondence between social identity and educational attainments.
Over time there has been some change but we have characterised the speed of this change as “snail’s pace”. For the two bottom layers of the social category, i e, SC/ST and Muslims, the change is largely from poverty to vulnerability. Perhaps the speed of change is also determined by a combination of social identity and educational endowments.
Despite the formidable constraints, education seems to provide the best hope for overcoming poverty and vulnerability. The speed of change has been faster wherever the educational attainments are higher."
There is an increase in the percentage of middle+higher income group from 16.2 perecent in 1993-94 to 23.3 percent in 2004-05.
If we use another mesurement for' middle class' ( I do not how the two are related) India may be doing better than USA in one respect. According to Christopher Caldwell of FT:"A standard measure defines “middle-income” households as those earning between 75 and 150 per cent of median family income, now about $60,000. Where 40 per cent of American households met that definition in 1970, only 35 per cent do today. (Using “income” as a synonym for “class” is crude, but that is how US social scientists do it.)". However, it seems that 53 perecent identify themselves as middle class.