India’s middle class is actually the world’s poor

[dray]

PPP is awesome at leveling the playing field and many people who study Economics like myself use it. But there's one problem with it: It doesn't really effect much.

It's true, that $1 in India can buy you $3 worth of stuff in America. But that doesn't mean an Indian who earns $10,000 annually is actually earning $30,000. It's called "Purchasing Power Parity" for a reason, it discusses Purchasing power, not wealth.

So an Indian with $333,000 is not a millionaire.

India's PPP conversion factor is 0.3, it means that one can have the same standard of life with $9,000 in India that one can have with $30,000 in America.

Price level ratio of PPP conversion factor (GDP) to market exchange rate | Data | Table

Officially and internationally, To be middle class you need to earn $10 per day at the lowest. But this is per person.

If Ajay earns $10 per day for himself, his wife & 2 children, they're poor. Because they have $2.50 per person.

Even if they can eat 2 meals per day and have a 4 MBPS internet wi-fi connection, 150 cc bike, and so on. They are poor.

Sorry, that's how the world works :/

Similarly, $10 in America means $3 in India, what is currency other than a tool to represent purchasing power? The concept of PPP is there to only determine the comparative income and living standards in different countries.

 

[Kashmiri Pandit]

Family of 4 , Yearly Income of 20 Lakhs .
I am in Lower Middle Class .

This situation in US will make me poor .

 

[dray]

Family of 4 , Yearly Income of 20 Lakhs .
I am in Lower Middle Class .

This situation in US will make me poor .

20 lakhs and lower middle class?

 

[Kashmiri Pandit]

20 lakhs and lower middle class?

Low on savings

 

[Vapnope]

The criteria to judge middle class is confusing, in some countries anyone earning 5 to 100 dollars is in middle class and in some its 3 to 100 dollars. I think if we have a single definition then one can decide.

 

[The Silent One]

The criteria to judge middle class is confusing, in some countries anyone earning 5 to 100 dollars is in middle class and in some its 3 to 100 dollars. I think if we have a single definition then one can decide.

In their Middle Class study, Pew Research Center suggests a minimum of $10 per day to be considered Middle Class.

A Global Middle Class Is More Promise than Reality | Pew Research Center

Therefore, if you earn $10 per person in your household you are Middle class.

If you're interested, they created a Middle Class calculator to see how you compare to others in your country:
Are you in the global middle class? Try our income calculator | Pew Research Center

 

[Vapnope]

In their Middle Class study, Pew Research Center suggests a minimum of $10 per day to be considered Middle Class.

Like i said there are various criteria, i was reading two papers on Chinese and Indian middle class and found this table as well ,

 

[The Silent One]

He is saying "If he is buying McDonald at $ 5/- a piece than whole world should buy it at that price, otherwise they are poor"

I hope you got it, thats what I got and I replied accordingly..

No

You consider Poor (from what i'm guessing) to be somebody who is starving, without internet or a means of transportation. I was poor in the US for 2 years, and i had everything you have. I ate 3 meals per day, i never starved. I had a house and internet etc. I even had enough money to buy clothes once every 2-3 months.

Poor, Middle Class, Upper class etc. are terms meant for your income status. Not your standard of living.

Being Poor in India is different from Poor in the US or Somalia. You said you can eat 2 meals for $2 in India. When i visit Morocco every summer, i eat 3 meals for $1.75 max. But again.
Being Poor in Morocco is different from being Poor in India.

I'm not trying to insult India or make it look bad. but if you earn less than $10 per day per person, you are poor.
it stops there. it doesn't matter how well you eat, or what you own. you are poor.

 

[Vapnope]

Btw I calculated on above given link and i belong to 0.4% of my country. Funny though

 

[Rajaraja Chola]

No

You consider Poor (from what i'm guessing) to be somebody who is starving, without internet or a means of transportation. I was poor in the US for 2 years, and i had everything you have. I ate 3 meals per day, i never starved. I had a house and internet etc. I even had enough money to buy clothes once every 2-3 months.

Poor, Middle Class, Upper class etc. are terms meant for your income status. Not your standard of living.

Being Poor in India is different from Poor in the US or Somalia. You said you can eat 2 meals for $2 in India. When i visit Morocco every summer, i eat 3 meals for $1.75 max. But again.
Being Poor in Morocco is different from being Poor in India.

I'm not trying to insult India or make it look bad. but if you earn less than $10 per day per person, you are poor.
it stops there. it doesn't matter how well you eat, or what you own. you are poor.

In that case world should give us "underdeveloped" status and give us free tax benefits

 

[Jacob Martin]

PPP is a good measure of how much one can buy within the domestic economy. However, certain caveats exist:

1. It takes into account a standard basket of goods and services, whereas each person's consumption varies.
2. If a country has a favourable PPP conversion factor, such as India's then consuming local services such as food at restaurants, hired help, etc. will be cheaper, as the input cost of labour is cheaper. Similarly, locally made goods will also tend to be cheaper.
3. However, imported goods will not be influenced by PPP factor - they are affected by exchange rates, taxes, etc. So a person who consumes more imported commodities will get very little advantage out of India's favourable PPP factor.
4. Lastly, PPP does not help when paying for imports. It only helps in boosting purchasing power of citizens in the domestic economy. When dealing with the outside world, nominal values at current exchange rate come into play. So India's favourable PPP does not get it any concessions when paying for import of crude oil or defence equipment, etc.

 

[aanshu001]

Officially and internationally, To be middle class you need to earn $10 per day at the lowest. But this is per person.

If Ajay earns $10 per day for himself, his wife & 2 children, they're poor. Because they have $2.50 per person.

Even if they can eat 2 meals per day and have a 4 MBPS internet wi-fi connection, 150 cc bike, and so on. They are poor.

Sorry, that's how the world works :/

Then more than half of service class & govt employees will not able to make the middle class, services in India are cheep from transportation to telecom, basic medical ( you can get consultant of a decent MD Dr. for INR 200 in city like Delhi)

What is costly in India is specialized & high end services

 

[dray]

if you earn less than $10 per day per person, you are poor.
it stops there. it doesn't matter how well you eat, or what you own. you are poor.

Then we should dump such a bogus theory in the nearest dustbin asap.

 

[Grevion]

There is a reason why PPP method was developed. To sort out deficiencies while comparing standard of living of a developed country vis-a-vis a developing country. It takes everything into account from cheap labor to low cost of raw goods which makes cost of living Cheap in a country. The cost of living is high in the US as compared to the cost of living in India or China.

 

[Indika]

No

You consider Poor (from what i'm guessing) to be somebody who is starving, without internet or a means of transportation. I was poor in the US for 2 years, and i had everything you have. I ate 3 meals per day, i never starved. I had a house and internet etc. I even had enough money to buy clothes once every 2-3 months.

Poor, Middle Class, Upper class etc. are terms meant for your income status. Not your standard of living.

Being Poor in India is different from Poor in the US or Somalia. You said you can eat 2 meals for $2 in India. When i visit Morocco every summer, i eat 3 meals for $1.75 max. But again.
Being Poor in Morocco is different from being Poor in India.

I'm not trying to insult India or make it look bad. but if you earn less than $10 per day per person, you are poor.
it stops there. it doesn't matter how well you eat, or what you own. you are poor.

have you tried considering comparing medical insurance ?
being poor is relative.