The Indian middle class is perhaps the most heterogeneous section of our society. While most impacted by common problems, it has also gained the most from incisive yet simple solutions over the past nine years. This has been largely due to Prime Minister Narendra Modi’s focus on the middle class, through his government’s mantra of “ease of living”. Its unambiguous focus has been to rationalise the tax burden of the middle class, put more money in their hands, improve healthcare and secure their future, provide state-of-the-art infrastructure, and most importantly, to eradicate corruption.
At the time of Independence, our nation had a pyramid of classes. The wealthy were at the apex, followed by the middle class and the vast base of the deprived and destitute. Today, things are changing at a fast pace. Many sections of society are now inching towards the ballooning phase, where the middle class has a lot more occupants with few at the top and the bottom. Not so long ago, the middle class found themselves between the devil and the deep blue sea, forever trying to make ends meet while aspiring for improving their quality of life.
The anger of the middle class was visible in the streets and on social media during the UPA years. The middle class got a ray of hope with the victory of Narendra Modi in 2014. At that time, many critics said that the middle class was infatuated with Narendra Modi and hoped this spell would soon end. However, the Prime Minister has continued to prevail by delivering consistently on expectations, breaking all precedents. The fact that the people have repeatedly blessed PM Modi in national and state elections is proof of the tremendous support he enjoys among the middle class.
On the one hand, he tried reining in inflation, which was frequently touching double digits, and on other hand, he was able to give a clean, corruption-free government. The average inflation between 2006-07 and 2013-14 was 8.7 per cent; that dipped to 4.6 per cent during 2014-15 to 2021-22. Inflation was low in India even during the Covid period, compared to other countries. In January, the International Monetary Fund lauded India for being a bright spot in the world economy.
Most previous governments largely left the middle class in the lurch as they were neither a vote bank nor a money bank for political parties. In contrast, the Modi government has viewed the middle class as an evolving partner and a key enabler of India’s path to great power status.
In 2017, the government implemented the Goods and Services Tax (GST), which was a long pending reform. GST has ensured tax compliance plugging many systemic leakages, reducing cost of various goods to ensure more savings and disposable income for the middle class.
The reforms in the banking sector including better asset quality, recapitalisation of PSBs, enactment of the Insolvency and Bankruptcy Code and the ease of credit flow have aided the banking sector to become “wealth job creators”. Lowering the overall interest burden on loans has benefitted the middle class immensely.
The Covid pandemic saw the resilience of India’s medical sector. Our government was able to vaccinate the highest number of people at lightning speed. This has been possible thanks to the consistent improvement in access and quality of health care services across India. Jan Aushadi Kendras across India have offered low-cost generic medicines, while medical implants like heart stents and knee implants have seen their costs drop.
Similarly, the middle-class dream of home ownership has become a reality. Various schemes of the government like the CLSS scheme for PMAY-Urban or SWAMIH (Special window for affordable and mid-income housing projects) for completion of stalled projects have been encouraging steps in this direction.
Owning a car was once a luxury for the middle class. While we see an increase in new car sales, we are also witnessing the market of pre-owned cars increasing at a very high pace, indicating the emergence of the neo-middle class.
The twin mantras of the government — Make in India and Atmanirbhar Bharat — have all resulted in greater job opportunities. The government has not limited itself to being a job creator but is stimulating the entrepreneurial ecosystem of India to create more jobs, which will have a trickle-down effect. With small towns of the past decades becoming boom towns, the middle class is thriving across the length and breadth of the nation.
Impeccable infrastructure ensuring seamless movement has become a source of pride for Indians who can now boast of world-class roads and highways. The focus of the government on high-speed railways, world-class road facilities, and increasing the network of urban transport has benefitted the citizens. There has been a massive increase in spending by the government on infrastructure, be it physical or digital. In the last eight years, the number of airports has gone up from 74 to 148, and the number of cities with operational metros has gone up from five to 20. From the state-of-the-art Vande Bharat trains to the rising number of colleges and universities, the middle class has benefitted the most.
The cost of mobile data has gone down sharply in India. While even in developed countries, the frequency of online payment of bills is low, digital payments have changed India forever. In December 2022, UPI, which forms a major part of the digital payment system, processed a staggering 7.82 billion transactions valued at Rs 125.94 trillion.
The middle class is experiencing flexibility, accessibility, affordability and liberty like never before. The narrative that the middle class was one step away from slipping into poverty is now a thing of the past. The growth achieved is irreversible and its lasting momentum will ensure further upward mobility. With dreams and aspirations coming true, the opportunities for the middle class are limited only by imagination. With a plethora of opportunities knocking on the door, the immense potential of the great Indian Middle Class has finally been unlocked by the Narendra Modi government.
The writer is former CEO, Prasar Bharati
