|
|
|
|
|
The middle income group (MIG)-those with an annual household income of Rs 2-10 lakh per annum-is expected to increase at 13.7 per cent per annum over the next four years against 12.2 per cent over the last four years, says NCAER. Further, the size of the lowest income class will shrink from the current 72 per cent to 52 per cent. This is expected to significantly boost the sales of consumer durables. While the rest of Asia takes its consumer cues from the jostling bargain-hunters of Hong Kong and Shanghai, or the stylish shoppers of Tokyo's Ginza, the fact is that India, unnoticed, may well be undergoing the region's biggest and longest lasting consumer boom. Since the liberalisation bandwagon began to roll during the early nineties, India made a dramatic transition from being a supply-constrained to a demand-driven economy. With a large middle-class population and their rising level of affluence, the country has one of the largest consumer markets across the globe and is reckoned to be at par with the other Asian behemoth, China. The middle class in India has the sense that it is coming into its own; that it has acquired the numerical strength to make the Indian market matter even in a global context. The cacophony on television, the visible shift in focus of the general newspapers (out with coverage of city slums, in with coverage of shopping malls), the rush to start new airlines and the obvious international interest in India, all say the same thing: the middle class in India has arrived. In India's ascendant trajectory towards global power status, one major strength that is attributed to it is the existence of a large English speaking, highly educated and professionally well qualified middle class. A highly educated and economically prosperous middle class provides the backbone of an advanced nation and in the case of a developing economy like India it provides the shoulders and the muscle on which the nation climbs the trajectory to power. The "Great Indian Middle Class" is said to number today between 320-350 million people. This amounts to nearly 30 per cent of India's total population. In comparative terms it amounts to much more than the entire population of the US. As Indian consumers move up in the middle class, they also move from two to four wheel vehicles, from small cars to larger vans. The size of India's middle class has led business forecasters in the West to place India among the world's top 10 emerging economies. Sometimes called the next Asian Tiger, India, as the world's most populous democracy, is predicted by some to compete with China as the next economic superpower. Analysts believe the driver behind the consumption explosion is a combination of factors like falling or stagnant prices, a profusion of new products, booming credit finance, the sudden reduction of traditional savings options and a sharp increase in the services sector - IT, back office, finance, insurance and retail. The age profile of the Indian population is yet another bet for continued spending growth. Over 45 per cent of India's population is less than 19 years, which is at the forefront of the current boom, and would continue to be so. The rise of retailing The retailing space has historically been dominated by the unorganised sector largely by small-sized shops clustered together in a market. The most important change in the retailing pattern that led to the boom in consumer spending has been the rise of organised retailing. This space is expected to log a ten-fold growth from the present 2 per cent of the total retail industry to a significant 20 per cent by the end of the decade. Another notable trend is the development of integrated retail-cum-entertainment centres or shopping malls. An increasing number of retailers are focusing on malls now as opposed to standalone developments. While the number of shopping malls has seen a massive surge in the recent past in the metros and their suburbs, the latest trend in this sector is the increasing focus on providing leisure activities such as multiplexes, facilities for kids' entertainment, eateries etc. within the mall premises. Nonetheless, the real confidence in sustaining the party perhaps lies elsewhere: in the irreversible change in the pattern, not level of consumption. More and more Indians are moving away from functional life to a lifestyle of fulfillment. And that is the trend that will survive occasional dips, if any, in spending. Rising out of a nation of more than a billion, India's middle class is considered by many to be its last potential saviour. Though hard to define statistically, its work ethic and focus on upward mobility may spread the benefits of economic growth across the country. The fixation on education, a universal route up the class ladder, may succeed where Nehru's socialism and central planning have failed. But even spreading education will be an uphill battle in such a vast nation. India has the largest number of illiterates in the world, an amazing 290million, more than the combined population of the U.S. and Canada. Because India is at the forefront of information technology and education is needed to maintain that position, national policy and individual family decisions focused on education may indeed lead India to a better-educated and wealthier future.
|
|
Issue Contents Write to us Subscription Syndication INDIA TODAY |
INDIA TODAY PLUS © Living Media India Ltd |
 |
