Shrinking of the Middle Class and the Income disparities.

In my post on the Impressions from my visit, I mentioned my thoughts. Anurag, has correctly questioned my enthusiasm of India. There are many things that need changing and just some actions that seem encouraging don’t change the country as such. We, as a country, are going nowhere until lots of things change. And disparity amongst the rich and poor is one of those things.

I did mention the high price of the apartments in Delhi and Mumbai – which are obviously matched by higher and higher salaries. There was an issue on salaries in Business Today while I was there which mentioned how salaries for Sr. Managerial talent started from Rs 1 crore and rose to as much as Rs 10 crores in Investment Banking! Now, here is an incident which brings out the starkness of the comparison..

I was having my ice cream in the inner circle of Connaught Place (Block B I think)… and this little kid approached me asking for polishing my sandals. I had nothing much to do and I felt that my five minutes could help this kid so I indulged myself. As he started another kid next to him – with those boxes for polishing shoes – declared that he was happy to have made Rs 150 that day and he would take off now. The kid polishing my sandals did not have one of those boxes and was not so successful that evening. He used a plastic bag for his tools.. which didn’t help market him to his “prospective clients” unless he approached them. “How much does a box cost?” ….. “between Rs 150 to 200” he said. That was the price between the happiness of going home to his parents early vs slogging extra hours into the night! Rs. 150 * 30 = Rs. 4500 (at the most!) vs Rs 10,00,000 a month!! THAT IS THE DISPARITY!

I just saw a program with Glen Beck and Lou Dobbs. As much as I criticise Dobbs, he did say something that to me sounded very significant.. that the American society’s prosperity has always been ensured by the middle class. These days when this middle class is shrinking, the entire structure of the society – which was an “aspirational society” (or a land of opportunities) is at grave risk! I agree. We need to create a strong and a big middle class in India. For that, the poor would need a helping hand to graduate to the middle class level. Which means more resources, jobs and education. Without these three, we would be left with LARGE poor population and some rich folks.. and an insignificant middle class! That would be India’s greatest tragedy.