My view on the various income groups in India and the level of ‘joy’: only a limited correlation with access to money

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India has been a class-based society for decades now. The difference between the public position of an average security guard and the managing director of a medium size company, both working in the same building, is significant. I haven’t seen any signs to things changing. In fact, things could get even worse because money is widely considered as the ‘new caste’. The access to capital between the top 1% and the rest of the population will change, only benefitting the best earners. But what about the levels of joy? Does it make people happier when they have access to significant amounts of money? And what is the situation on the poorest people in India? Are they happy or very sad? 

Sociodemographics of India: upper class and rich class numbers are low

Before answering the question, it’s important to understand the sociodomographics of India. Most people will understand the status by considering India to be a third world country. However, it’s also one of the BRIC-countries, with huge economic growth in the recent years. India has a population of roughly 1.3 billion and this number is still on the clime. India’s per capita income was 1610 dollars per year in 2016, based on research done by the World Bank. This income varies from state to state. Bihar is widely seen as India’s poorest state, with an average income of roughly 682 dollars. Goa is India’s ‘richest’ state, with an average income of 14,903 dollar. With over 247 Million households, the average size of an Indian household is approximately 5 people. This probably doesn’t say much, but let’s compare it to the average household size in the Netherlands. The average size of a Dutch household is 2.2 persons, so households in India are more than twice this size.

It’s almost impossible to talk about the various income levels in India without mentioning ‘class’ and I feel sad for using this specific word. I found a lot of research and numbers about the various incomes, also related to class. However, the outcomes would vary with fluctuating differences. Based on personal experience & online research I came up with the following personal interpretation about the different income groups, based upon national figures:

Below poverty line: 12,5%, approximately 165 million

About 12,5% of the Indians live below the poverty line, according to research done by The World Bank.  Thus, more than 165 million Indians earn less than 130 INR a day (approximately less than 2 Dollar) which is about 50.000 INR (less than 690 dollar) a year. People in this category live in slums, tents and some even live on the streets. If they are not begging, people are most probably doing dirty, dangerous and/or poor laboured work. They work as street sweepers or working as a lowely paid day labourer. Each new day is a (financial) challenge for them, because the shortage of money is a pressing factor in their life.

Lower class: 70%, approximately 927 million

Approximately 70% of the Indians belong to the lower class, a little more than 927 million people. The average income of a household ranges between 50.000 INR (less than 690 dollar) and 450.000 INR (6.500 dollar) per year, thus this group is very diverse. People in the lower class generally work as drivers, office clerks, maids, cooks, waiters, administrators or some other blue collar jobs. However, the largest part of this group are actually into farming. They own or rent a small piece of land, to produce vegetation. Life is most tough for these people as a large part of this group will not have access to good health facilities. Furthermore: the sanitary facilities are mostly very poor. Recent research (2017) brought to light that this vast number of people, were function without access to proper toilets. PM Modi is doing a lot to build sanitary facilities for these people, who mostly to belong to the lower income group. Family members with a regular income in this group can afford to buy a second hand two-wheeler. Having a zero-tax system for every individual earning less than 2.500.000 INR (3.250 dollar) a year is a large part number. There is no obligation to pay taxes on this income. Most probably no one in this group would pay tax, as a lot of the payments in this category are generally being carried out in cash.

Middle class (lower and middle): 16%, approximately  212 million

Having seen the high economic growth numbers for years now, the middle class (lower and middle) group is by far the fastest growing group within India. An average household will have a yearly income inflow between 450.000 INR (6.500 dollar) and 24 Lac’s (35.000 Dollar year), thus this group is also very diverse. They can send their kids to private schools, mostly near located in more upmarket areas within the city. Members can afford to buy themselves a low-entry smartphone, although some family members will take an EMI (loan) to get one. The husband would probably be bringing in the largest pay check, but a lot of women in this group would also be working for higher paid jobs. People in this group are usually in IT, Banking, Accounting or own a small but successful business. If they’re in a senior position, they can afford to buy themselves a small second hand car and once they have climbed a bit further on the career ladder they would opt to buy a new one. People in this group are enjoying themselves by going to malls, eating at fancy restaurants and shopping. They spend their holidays by visiting their home village, often in another state. People in this group are the main target for the evert growing market in air traffic.

Upper class: 1%, approximately 13 million

The average yearly household income in the upper class is somewhere between 24.000.000 INR (35.000 Dollar) and 50.000.000 INR (73.000 Dollar). They can generally live in upscale apartment with 2 bedrooms, acquired by a mortgage, or they live in a rental apartment. Kids are being treated as royalty, and they often being send to private schools and well-known colleges. They like to explore the country, going for holidays to Goa, Kerala and Ladakh. Some of them even go abroad, to neighbouring countries like Sri Lanka, Thailand, Bhutan or Nepal. Most of these families will own one or two cars. Almost everyone in this group has one or more domestics in the house.

Rich class: 0.5%, 6 million

The smallest group in India is probably the most visible one, especially for foreigners residing in India. There is a thin line between the people in this group and the upper class, but the difference is very visible: They live lavish lifestyles, enjoying all the perks of earning a very high income and/or have access to unlimited amounts of money. It’s very hard to estimate the size of this group, but it’s definitely not bigger than 0,5%, roughly 6 million. Although there is some upwards mobility, driven by entrepreneurs from middle class groups, most of these people have been born with a silver spoon in their mouth. Their parents own ancestral property and/or are managing a large and successful business. They live in the elite neighbourhoods, generally in very big houses full of an entire support staff (cook, maid, driver). They can afford to travel abroad a couple of times a year and even invest to send their kids to the best universities. The monthly money inflow in this group needs to be at least 3 Lac’s a month, a little less than 3.500 Dollar. According to a Cap Gemini research of 2016, India has the world’s fastest growing number of millionaires (in Dollars). It now has roughly 263.000 millionaires, and that number is on the clime.

Caste system: Money is the new caste

The caste system in India has been banned for years now, but it’s still alive and kicking. People from higher castes are proud of their roots, often bragging about it without realisation. Belonging to the ‘Brahmin caste’ actually is of great importance, although people will certainly deny the this. However, there is something else going in India. I’ve noticed a new segregator: MONEY. Large numbers of families in the lower and middle class have spent extra money to send their kids to the best colleges and universities. Some of these kids have now climbed on the career ladder, earning more money than their parents did. This sociodemographic phenomena is called the ‘upwards mobility’. For those people and for others with access to money to have  a good life, belonging (or not) to a certain caste is of no importance.

How should one ‘measure’ happiness or joy? No relevant research

I don’t want to talk about incomes or classes, but it’s important to set the context for the actual topic that I would like to address here; JOY. One of the neighbouring countries of India (Bhutan) has a ministry of happiness. When I found out about it, something a question popped into my mind: how do you ‘measure’ the success of all your efforts? Is it possible to measure the level of joy and, if yes, would it be possible to define the differences per income category? I went online, soon to find out that there is no available (public) research on this topic.

My experiences: there is joy in almost every group

I’m planning to write some more articles about the sociodemographics in India. One of my insights after living here for a while now is something that sounds weird but it’s true: some parts of the income groups are ‘closed economies’, meaning that people will only buy goods from those in the same group. Let me give you an example: a wealthy family will probably never visit an traditional Indian market. If they need vegetables, the cook in the house will buy it for them. Thus: someone from the same income group ends up buying the vegetables in the market.

But let me get back to my point, joy. As a foreigner I’m very lucky, because for us it’s easier to communicate with all the groups. I’ve been invited to parties at elite Indian houses and I’m good friends with the local chaiwallah (tea seller on the streets). Furthermore: based on the many encounters with all these people in India, I have a feeling about their level of joy. Being in a third world country, one would assume that poor people (lower class) would have a terrible life with a lot of a sad moments. I’m not denying their challenges, but one of my strongest insights about this group is their level of joy. They seem to be very proud, often very committed to their profession. Furthermore: I see a lot of smiling people within this group. Autorickshaw drivers in Aundh generally mingle together to play cards on the streets. Do they have less ‘fun’ than my millionaire friends in their elite houses? I don’t think so. I’m sure that some rich people would assume that they have a higher level of happiness, but they would probably mix-up joy and happiness. They definitely have more moments of intense joy, but are they necessarily more happy?

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