Population: A worry no longer?

Actually, I do not have a definite opinion regarding the answer to the question of India's population and its sustainability, though I have stated my preference here. This entry is more in the nature of a public musing. According to the 2001 census, India's population was 102.8 crore (cr). We are poised to overtake China in 15-20 years. Everyone agrees that India is bursting at the seams. So why my title?

Two years later, we will get the preliminary findings of the 2011 census. I expect that it will record India's population as being between 118 and 120 cr. And if that's the case, the tide would have begun to turn. Between 1991 and 2001, India added 18.5 cr people. At a 120 cr population in 2011, the corresponding figure for 2001-2011 will be 17.2 cr. This will be the first occasion since independence when fewer people would have been added in a decade than in the one preceding it.

Also, one of the legacies of the last decade of rapid economic growth has been the massive investment in education. Despite all the inefficiencies of government, we will still end up with a literacy rate greater than 80% in 2011. This has put in place a necessary precondition for rapid decline in fertility.

While the UN still predicts a massive population explosion in India, with a projected population of over 160 cr in 2050 (and still growing), I remain optimistic that we will be able to attain stable numbers of around 150-155 cr by 2050, Population might even decline by the end of the century as the huge numbers of people being born now die off (The highest number of births recorded in a year in India was in the late 1990s).

Is 155 cr a sustainable population for a country of our size and natural resources? Given our woefully underproductive economy (agricultural yields being half or worse than those of developed countries, for example), which can be easily improved, I think we can manage such a population. Obviously we would need to become more urbanised and free up land for forests and wildlife, and remain relatively frugal as a society in our lifestyles. And the impact of global warming (and other presently unforeseen calamities) is a big if. If we had committed sufficient resources to education in the 1960s and 1970s, we would not have been on the path to becoming the world's most populous nation. But we might nonetheless be able to escape with survivable damage.

The Rich Middle Class

Last week, I was sitting in a restaurant in Madras with a friend from WIMWI chatting about how expensive food in the city was. In our conversation, he described both of us as being "middle class". Our discussion did not become more involved and we moved on to other topics, but the phrase has lingered in my mind.

Virtually everyone whom I have known and conversed with has described himself or herself and their families as being middle class. It is a description that rankles me sometimes. A recent report in The Economist described a commonly accepted range of middle class income as being USD 2-13 a day. Assuming a PPP exchange rate of 10 rupees to a dollar, the upper end of the range translates into less than INR 50 000 a year. I have no doubt that the "virtually everyone" referred to above each belonged to families making more than that sum every year (even assuming only one earning member in the family).

A few years ago Mckinsey came out with a report ("The 'Bird of Gold': The Rise of India's Consumer Market") which described the middle class as being composed of households earning between 2 and 10 lakh each year. By that definition, many of my acquaintances might qualify, though not most. The definitions of the middle class sound reasonable, especially in cities like Bombay where rent alone can cost 2-3 lakh a year.

What's my point? Families earning 2-10 lakh may indeed be middle class by the absolute definition of the word, but relative to their fellow countrymen they are vastly better off. The number of people included in this middle class in 2005, according to Mckinsey, was 5 cr. That's less than 5% of India's population. Obviously the number of above the middle class income range is less than 1% of the population. Which means that 94% of India's population is neither rich nor middle class. They are therefore poor.

I think that the small creamy layer at the top who yet persist in describing themselves as middle class have contributed to the adoption, persistence and justification of economic policies that are harming the poor. A policy that is described as pro-middle class in the newspapers is likely to be considered a good policy. Yet if we think about it, such a policy may bring no benefits to the 80-95% of the population (or even harm them). Take the LPG subsidy, one of the most egregious examples. Less than 20% of India's population uses LPG, most presumably in the top quintile income bracket (see pdf link). Yet the government chooses to subsidise the rates of LPG, upto the tune of over 50% at the height of the oil bubble last year. If we were a rich country, we could call this a subsidy to the deserving middle class (though even that would not be a very persuasive case). But India is desperately poor. 26% of Indians live below the official poverty line of around INR 7000 a year. Shouldn't every single minute of our economic policy making thought process be devoted to ameliorating their condition?

Hence my annoyance at the use of middle class by very well-off friends to describe themselves (My mom does the same, which vexes me even further). 7000 rupees a year? 25 crore Indians somehow eek out a living on less than that. If only some of us who earn more than 100 times that amount each year referred to ourselves as the rich rather than middle class, perhaps we would be shamed enough into forgoing the cheap diesel and LPG we use.