Middle class slighted under UPA's rule

• The size of the middle class in 1996 was a paltry 25 million.
• In 2014 it is in excess of 160 million.
• According to McKinsey & Company, by 2015 the middle class will be 250 million or 20% of the country's population
• The middle-class subsidises government's welfare schemes

India's rising and politically conscious middle class which helped the United Progressive Alliance (UPA) return to power in 2009 soon went out off its radar. A close look at the last five years reveals that the UPA government shows it failed on most of the promises made to the middle class. The Congress did wake up after the middle class took to streets braving water canons and police charge protesting against Delhi gang rape.

The document adopted at the brainstorming introspection session held in Jaipur last year acknowledged "that there is a rising educated and aspirational middle class, especially in urban areas, and said a climate conducive to their advancement must be created. In the same section, it said the Congress will "take all steps to enable India to reap the demographic dividend" by creating "10 million jobs every year and impart skills training to youth to take up these jobs, even as it "pledges to create a business environment conducive to investment and entrepreneurship."

But even after this realisation, experts believe there were no practical steps to address the issues concerning the middle class, ranging from police reforms to maintaining high growth, employment, fiscal prudence, low inflation and giving new look to the urban development. The UPA II government seems to have faltered on most counts. Growth has tanked to below 5% level in the current financial year and price rise has burnt a hole in the pockets of all. Besides this, even after the Delhi gangrape case in December 2013, police reforms, and judicial reforms are still a far cry.

Sharing his perspective on the last five years of UPA II rule, BJP leader and spokesperson Prakash Javadekar told dna, "They forgot their own manifesto. On the urban development front, affordable housing is a very important issue concerning the middle class and also for those in the lower strata of the society. The low interest regime during the National Democratic Alliance rule gave a huge fillip to mass housing. Now with 12-13% rate of interests, EMI have become dearer and dearer."

According to Planning Commission data, almost 80 lakh jobs were created annually between 1998 and 2004. During the first four years of the UPA I, however, only about 16 lakh jobs were created annually.

"Another major aspiration of the middle class is jobs. However, millions of those in employment in sectors such as textile, garments, millions of lost jobs. People getting pink slips was a pathetic thing," added Javadekar.

Congress, whose all flagship schemes in the last ten years has been focused only on rural, semi-urban and poor classes, claims UPA has also done a lot to meet the aspirations of the middle class.

Congress leader Randeep Singh Surjewala told dna, "the government has worked on road network, railway network, port development, freight and industrial corridors for creation of job opportunities, which would ultimately help the middle class. We have maintained a fine balance between inflation and growth despite adverse conditions."

Congress leaders and think tank also claim that middle class has benefitted from power generation, airports and metros. "India's middle class has come of age. Indian middle class is almost the size of entire population of America. During the UPA regime, the economy grew by about Rs2.8 lakh crore per year, compared with Rs 1.14 lakh crore annually during the NDA regime. This essentially means more and more investments into airports, metros, railways, which the middle class has been utilizing over the last few years," said Salman Soz, Congress spokesperson and former world banker.

Experts do not buy that argument. "Look at the industry growth rate. It has been close to zero. If the industry is not growing, who will be hurt the most? The middle class! The UPA II has destroyed the middle class completely," said political analyst Prem Shankar Jha.

Interestingly, middle class concerns including income tax, job creation, and inflation have rarely been pursued by our MPs across parties.

Significant issues pertaining to the middle class have seen minimal representation in the parliament. An exercise undertaken by dna revealed that only 28 questions have been raised by our MPs on tax related issues since July 3, 2009 in the Lok Sabha. Out of these, only five questions pertained to income tax refunds – an issue which concerns middle class voters most. And this is at a time when the Thirteenth Finance Commission (2010-15) has projected direct tax revenue collection at Rs8,29,668 crore by 2014-15.

Promises on health security also ring hollow when seen in light of the facts. A working paper by the National Institute of Public Finance and Policy in 2012 on health care financing points at gloomy public spending. The paper notes, "It is believed that an important factor contributing to India's poor health status is its low level of public spending on health, which is one of the lowest in the world. In 2007, according to WHO's World Health Statistics, India ranked 184 among 191 countries in terms of public expenditure on health as a percent of GDP.

In per capita terms, India ranked 164 in the same sample of 191 countries, spending just about $29 (PPP). This level of per capita public expenditure on health was around a third of Sri Lanka's, less than 30% of China's, and 14% of Thailand's (WHO, 2010)."

BJP says if it comes to power, it will boost job creation. "We will increase public and private expenditure on infrastructure. Apart from roads and airports and railways, there will be focus on spending on irrigation and housing, which have massive potential for job creation," said Javadekar.