New entrants in India's middle class: Drivers, carpenters, pani puri vendors

A survey of around 800 households conducted by the School of Economics found a significant shift in the type of assets held by those who had just entered the lower middle class.

Almost everyone had a cell phone and a watch or clock. Over 70 per cent had access to electricity and about 60 per cent had a fan, owned a colour television, had a pressure cooker and a chair. More than half of them had gold jewellery and steel utensils.

"The aspirational expenditure is different because there is a clear difference in aspirations among the lower classes (poor) and the lower middle classes," says Hatekar.

The study proposes a new category called the 'new middle' with daily per capita consumption spending range of $2-$10. Though the largest number of the 'new middle' families are likely to have moved into the lower middle class, some have also moved up to middle-middle or upper-middle - hence the large consumption band of the 'new middle'.

The period between 2004-05 and 2011-12 has witnessed a dramatic swelling of the new middle class - from just about 28 per cent to a little over 50 per cent of the total population. In absolute terms, the size of the new middle class is estimated to have increased from 304 million to 604 million, according to the study.

"The middle class is now a diversified group because the country now offers various opportunities for creation of wealth," says S Parasuraman, director of Tata Institute of Social Sciences.

One of the key purposes of the study was to look at the contribution of off-shoring services (ITES-BPO) to uplift of poor households. Hatekar and More conclude that the sector has not made a significant direct contribution, at least in quantitative terms, to the creation of the new middle class.