Reuben pointed me to this TIME article about the emerging Indian middle-class with its spending power.
[There] is a new breed of consumer in India young, increasingly wealthy and willing to spend on everything from mobile phones to sneakers to French fries. In the not-too-distant past, such goodies were off limits to all but a fortunate elite in India, but a rapidly changing economy is making the higher life available to more and more of the country’s billion-strong population. College graduates are landing well-paying jobs in a host of emerging industries that barely existed in India three years ago: retail chains, fast-food restaurants, mobile-phone companies and especially call centers, data-processing firms and other businesses that do “back office” work for U.S. companies. KSA Technopak, a management-consulting firm in New Delhi, estimates that these young adults command $10.5 billion in cash to burn. The spending of these college grads is rising about 12% a year more than twice the pace of the economy’s growth.
The youngsters are part of a middle-class boom in India. The National Council of Applied Economic Research estimates that the number of people living in households that earn at least $1,800 annually considered the minimum for middle-income families has increased 17% in just the past three years, to more than 700 million. At this income level, Indian families can purchase motorbikes, televisions and refrigerators. The organization expects the number to rise an additional 24% by 2007. “Income is growing like anything,” says R.K. Shukla, a statistician at the National Council. “The future is very rosy in India.”
I am not so sure about the 700 million figure. That would make it 70% of India. Considering that that is how much of India lives in rural areas where incomes haven’t gone up much, I think there maybe an error in what TIME is saying.
Anyway, what is definitely beyond doubt is that there is a great propensity to spend among the growing middle class. One can see the results: malls, multiplexes, restaurants, mobiles and the softer (dumber) stories in most of the Indian media.