For last several years, there has been stagnation in wage and consumption. Despite the GDP growth forecast of seven percent and more, the urban consumption in recent months continues to be static. There has been unexplained absence of higher broad based consumption. The official consumption expenditure data from the NSSO survey shows that consumption growth for nearly a decade is running at about 3.5 percent annually which is half the GDP growth. Its natural outcome should have been satisfactory growth in savings. In contrast, the household savings are coming down.

According to data, it is obvious that contraction could only be the result of exaggeration in the GDP growth. In fact to explain the dichotomy, the available data on stagnation and consumption among the Indian middle-class needs to be studied more closely. As per the American Pew Research Centre, India’s middle-class was roughly 50 million to 70 million in 2010 and this grew to 150 million to 200 million by 2020. Pew also conducted research in 2017 to assess the size of the middle-class in India and China for an income range of 10 to 50 dollars a day on a Purchase Power Parity (PPP) basis. As per this criterion, Indian middle-class was at 108 million in 2016 whereas China’s middle-class was 707 million strong.

To be more accurate, 61 percent of the Chinese population live on more than 10 dollars a day and only 3 percent of Indians live on 10 dollars plus a day.

In India, tax to GDP ratio has remained roughly in the range of 15 percent to 18 percent during this entire period. This is clearly another sign that India’s middle-class size is not growing at the desired pace. And in recent years it has experienced severe stagnation, which reflects in the shrinkage of incomes and savings. The official narrative pretends to be oblivious of such deeper problems and continues to be in self-congratulatory mode, citing how India remains the fastest growing economy in the world. The tragedy is that no one wants to know how this growth is distributed.

Centuries back, when capitalism emerged over the debris of the feudal society, it had carried with its new avatar the contradiction between two basic classes and also a duality in its own character. It had but established new classes, new conditions of oppression, new forms of struggles in place of the old ones. Our epoch, the epoch when the capitalist system moves over to corporatisation and finance capital rules over the roost, bourgeoisie, with its distinctive feature has simplified the class antagonism. Society as a whole is more and more splitting up into two great hostile camps, into two great classes, directly facing each other, bourgeoisie and proletariat. It was the contribution of Lenin towards the science of dialectics.

He had also explained that capitalism with its every step ahead, had to meet its changing needs, and for that it brought a new stage of political awareness, that promised a new chapter in its evolution. It was the phase when the modern industries came into existence, and along with the world market, was born the modern state. With it came the end of all feudal, patriarchal order. Lenin had analysed the role of this new class that put an end to all feudal mystic relations and the reality was exposed in all its brutality. Prominent among the new turns, was Free Trade. The exploitation from behind its cover of religious and political myths came out as the naked, brutal, direct force, and bourgeoisie remained bereft of its colourful veil, leaving great scholars, writers, scientists and other such as its “paid labourers”. It was this new turn that brought the middle class in the frame.

It is a dialectical process of evolution that capitalism helps to bring in the society. Despite its excesses, it is also known for constantly bringing revolutionary changes in the mode of production, followed by relations of production, and then changing the entire socio- political and economic gamut of the society. In the face of the Free Trade, the market keeps expanding, and with its products keeps haunting the globe.

As capitalism ripens, along with its evolution, there is the middle class too evolving. It was Lenin who discovered the dual status of middle class. With its dialectical stance, it contained features of working class as it was quite close to their financial status. At the same time, it was basically not working class, it was supportive part of capitalist system only. It was this dialectical status that inspired Lenin to write the book “Two Tactics of Social Democracy”. It was when he was preparing for the strategy of united front with the unity and struggle with each of the ingredients for explaining how to continue struggle in a feudal/capitalist society. Imperialism too has same dialectics so far as middle class is concerned.

Such economic success at the top leaves less for everyone else. (IPA Service)