Urban Middle Class Estimates in Pakistan

[k_n]

India National Council of Applied Economic Research defines the 'Middle-Class' as those with individual income between $4000-$21000 ($20,000-$120,000 in purchasing power parity terms) . But this definition suits only about 60m (under 6 per cent) of the population.

We can take forward the argument from here :

1. Indian Take: The Size of India's Middle Class

here is the source ( NCAER )

http://www.ncaer.org/popuppages/eventdetails/e3feb2006/SKBery.pdf

It gives 10.7 million households with an income $4000-$21000 ( US $ at 2001-02 prices ) and cites the source .

 

[riju78]

India National Council of Applied Economic Research defines the 'Middle-Class' as those with individual income between $4000-$21000 ($20,000-$120,000 in purchasing power parity terms) . But this definition suits only about 60m (under 6 per cent) of the population.

We can take forward the argument from here :

1. Indian Take: The Size of India's Middle Class

here is the source ( NCAER )

http://www.ncaer.org/popuppages/eventdetails/e3feb2006/SKBery.pdf

It gives 10.7 million households with an income $4000-$21000 ( US $ at 2001-02 prices ) and cites the source .

k_n u wont win this argument....just accept we r poor... karan, desiman and many have given up on this man...

 

[karan.1970]

Why is that surprising? According to available data, 60% of Pakistanis and 78% of Indians live on less than $2 a day.

List of countries by percentage of population living in poverty - Wikipedia, the free encyclopedia

But a nation's GDP is not the sum total of the income of all citizens. Its much more than that..

By your definition, the income of 25% of Pakistanis contribute towards 78% of Pakistan's GDP.. GDP is the total revenue of the country and individual incomes are a small part of the total cost of goods.. Just doesnt fit...

 

[RiazHaq]

But a nation's GDP is not the sum total of the income of all citizens. Its much more than that..

By your definition, the income of 25% of Pakistanis contribute towards 78% of Pakistan's GDP.. GDP is the total revenue of the country and individual incomes are a small part of the total cost of goods.. Just doesnt fit...

For most developing nations with low volume of international trade and investment, there is very little difference between GDP and GNI.

Also, the bulk of the GDP and GNI are produced by middle and upper middle class citizens in most countries.

 

[karan.1970]

For most developing nations with low volume of international trade and investment, there is very little difference between GDP and GNI.

Also, the bulk of the GDP and GNI are produced by middle and upper middle class citizens in most countries.

Do you have the same figure for India.. i.e. number of folks with PPP income over $10000 in India?

 

[RiazHaq]

Do you have the same figure for India.. i.e. number of folks with PPP income over $10000 in India?

No, I don't. But I am going by Nancy Birsall's paper that says that all Indians making more than $10 a day ($3650 a year) are in the top 5% of the population, leaving no middle class in India by her definition.

What it means to me is that Indians earning $10,000 a year make up less than 5% of India's population.

India has no middle class? - India - The Times of India

 

[Skeptic]

^^^ But I am sure a more defenitive indicator would be number of Income Tax payers in India and Pakistan. In Pakistan total no. of tax payers was

ISLAMABAD, Oct 10: The Central Board of Revenue expects to receive 1.75 million income tax returns by the end of the current fiscal year out of 2.28 million taxpayers in the country of 160 million people.

For India the same number is 31.5 million

Certainly much higher than 7X the numbers for Pakistan. (which is the factor for population difference)

And please don't even bother replying if your only response is - under-reporting of income by Pakistanis. It is applicable equally in India as well.

Both are govt. figures for the year 2006.

Although tax slabs in India are much higher than Pakistan (CONVERTING THE CURRENCY).

PS: No income tax on agricultural income in India. I am not sure if its Pakistan.

 

[shiningindia]

If what you say is true, then your parents belong in the top 5% of India's population ( about 55 million people) which Birdsall excludes from her definition of middle class.

You are missing the whole point of Birdsall's paper. It is the depth of India's poverty and its great inequality that leaves India with no middle class by her definition.

actually my family per person income is only $13.25 per day. and i belonged from middle class family. u can calculate it. there r 4 member in my family. and i think there r millions are families in india whose monthly income is b/w 50000-100000 Rs. and one more thing $1= INR 44

 

[RiazHaq]

^^^ But I am sure a more defenitive indicator would be number of Income Tax payers in India and Pakistan. In Pakistan total no. of tax payers was




For India the same number is 31.5 million

Certainly much higher than 7X the numbers for Pakistan. (which is the factor for population difference)

And please don't even bother replying if your only response is - under-reporting of income by Pakistanis. It is applicable equally in India as well.

Both are govt. figures for the year 2006.

Although tax slabs in India are much higher than Pakistan (CONVERTING THE CURRENCY).

PS: No income tax on agricultural income in India. I am not sure if its Pakistan.

Overall, Pakistan collects only about 10% of GDP in taxes, versus 17% in India.


List of countries by tax revenue as percentage of GDP - Wikipedia, the free encyclopedia

Some of the richest Pakistanis pay no income tax at all.

Pakistan's farm income is also exempt from income tax.

Most of Pakistan's tax revenue comes from indirect taxation.

Haq's Musings: Comparing US and Pakistani Tax Evasion

 

[Skeptic]

Overall, Pakistan collects only about 10% of GDP in taxes, versus 17% in India.


List of countries by tax revenue as percentage of GDP - Wikipedia, the free encyclopedia

Some of the richest Pakistanis pay no income tax at all.

Pakistan's farm income is also exempt from income tax.

Most of Pakistan's tax revenue comes from indirect taxation.

Haq's Musings: Comparing US and Pakistani Tax Evasion

Again Apples and Oranges.

Percentage of GDP from Tax income can be low because Tax rates are much lower in Pakistan (20% for top slab) 30% for India

PAKISTAN:
1. Where taxable income is below Rs. 180,000 0%
2. Where the taxable income is between Rs. 180,000 - Rs. 250,000 0.50%
3. Where the taxable income is between Rs. 250,000 - Rs. 350,000 0.75%
4. Where the taxable income is between Rs. 350,000 - Rs. 400,000 1.50%
5. Where the taxable income is between Rs. 400,000 - Rs. 450,000 2.50%
6. Where the taxable income is between Rs. 450,000 - Rs. 550,000 3.50%
7. Where the taxable income is between Rs. 550,000 - Rs. 650,000 4.50%
8. Where the taxable income is between Rs. 650,000 - Rs. 750,000 6.00%
9. Where the taxable income is between Rs. 750,000 - Rs. 900,000 7.50%
10. Where the taxable income is between Rs. 900,000 - Rs. 1,050,000 9.00%
11. Where the taxable income is between Rs. 1,050,000 - Rs. 1,200,000 10.00%
12. Where the taxable income is between Rs. 1,200,000 - Rs. 1,450,000 11.00%
13. Where the taxable income is between Rs. 1,450,000 - Rs. 1,700,000 12.50%
14. Where the taxable income is between Rs. 1,700,000 - Rs. 1,950,000 14.00%
15. Where the taxable income is between Rs. 1,950,000 - Rs. 2,250,000 15.00%
16. Where the taxable income is between Rs. 2,250,000 - Rs. 2,850,000 16.00%
17. Where the taxable income is between Rs. 2,850,000 - Rs. 3,550,000 17.50%
18. Where the taxable income is between Rs. 3,550,000 - Rs. 4,550,000 18.50%
19. Where the taxable income is between Rs. 4,550,000 - Rs. 8,650,000 19.00%
20. Where the taxable income is more than Rs. 8,650,000 20.00%

INDIA:
Up to 1,60,000
Up to 1,90,000 (for women)
Up to 2,40,000 (for resident individual of 65 years or above) NIL
1,60,001 – 5,00,000 10
5,00,001 – 8,00,000 20
8,00,001 upwards 30

Farm Tax as I mentioned is exempt in India as well.

Under and non reporting of income is equally prevalant in India.

Overall these are certainly people with reasonably high declared income - A fare comparasion rather than taking 2 different reports to compare (which might have used entirely different parameters.)

And as usual there has been a comfortable switch between PPP and nominal as per your requirement.

 

[karan.1970]

what exactly is the arguement here?

 

[Skeptic]

what exactly is the arguement here?

Basically trying to find a common base for comparasion. Number of Income tax Payee would certainly be indicative of the size of middle class right. Corresponding figures in 2006 -
INDIA: 31.5 Million
PAKISTAN: 2.28 Million

Tax slabs are mentioned which are higher in India - Indicating a person who would be taxed in Pakistan wont be taxed in India.

So proportionally size of Incme tax paying population is much higher in India - Indicating a bigger middle class.

 

[RiazHaq]

In India's case, everyone who makes $3,650 a year is in the top 5% (about 55 million people) of the nation's population. It is on this basis that economist Birdsall concludes that India has no middle class. Over 75% of India's population (versus 60% in Pakistan) lives on less than $2 a day, or $750 a year, according to Human Development Report 2009. The rest of about 20% of India's people falls between $2 and $10 a day.

Using Birdsall's proposed definition, Pakistan now does have a middle class of tens of millions (at least 10% of the population), as its 30 to 35 million people earning an average of $10,000 a year (well above Birdsall's lower limit of $3,650.00 a year) account for about 17% of Pakistan's population. Another 60% of Pakistanis (vs 75% of Indians) live on less than $2 a day, according to UN Human Development Report 2009. The rest of 23% of the people have incomes between $730 a year ($2 a day) and $10,000 a year, and a significant percentage of them could be classified as lower middle class.

Haq's Musings: 1999-2009: Pakistan's Decade of Urban Middle Class Growth

 

[Skeptic]

In India's case, everyone who makes $3,650 a year is in the top 5% (about 55 million people) of the nation's population. It is on this basis that economist Birdsall concludes that India has no middle class. Over 75% of India's population (versus 60% in Pakistan) lives on less than $2 a day, or $750 a year, according to Human Development Report 2009. The rest of about 20% of India's people falls between $2 and $10 a day.

Using Birdsall's proposed definition, Pakistan now does have a middle class of tens of millions (at least 10% of the population), as its 30 to 35 million people earning an average of $10,000 a year (well above Birdsall's lower limit of $3,650.00 a year) account for about 17% of Pakistan's population. Another 60% of Pakistanis (vs 75% of Indians) live on less than $2 a day, according to UN Human Development Report 2009. The rest of 23% of the people have incomes between $730 a year ($2 a day) and $10,000 a year, and a significant percentage of them could be classified as lower middle class.

Haq's Musings: 1999-2009: Pakistan's Decade of Urban Middle Class Growth

Usual apples and Oranges. You have taken Birdsall's concept but not her methodology. What was her method of determining the income of an individual. You have a completely different report with a different method for calculating income and applied it for Pakistan.

Number of poors in India even as per calculation by different commitees have come out differently - as their methodology was different.

More relavent would be Birdsall's assertion on Pakistan rather than combining it with Standard Chartered report.

 

[karan.1970]

So Riaz, is the assertion that as per Birdsall, Pakistan has a large middle class and India doesnt??