Manmohan Singh — a hero of Indian middle class

Former prime minister Manmohan Singh, who passed away on December 26, has largely contributed to the expansion of the size of the Indian middle class. He was seen as the chief architect of India’s economic liberalisation during his tenure as the finance minister in the early 1990s. Later, he played a vital role in transforming India’s economy as the prime minister for a decade (2004-2014).

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Since the early 1990s, the middle class became supportive of the new economic policies as they brought tangible economic benefits to them in the form of tax breaks and raising of the personal income tax ceiling. Moreover, foreign investment and expansion of industries, particularly the service sector, provided opportunity for job change and higher salaries for the middle class.

The middle class appreciated Dr. Singh’s style of politics since he was largely free from all ideological hues and was practical with an open mind. When he became the prime minister under the UPA-I regime, the middle class began feeling proud that they had a world-class economist and Oxford graduate as their PM. Even the NRI community shed its bias against the ‘dynasty’, and Dr Singh emerged as their symbolic hero.

Many scholars argued that liberal economic policies initiated in the 1990s by Dr. Singh, under the leadership of then prime minister P. V. Narasimha Rao, shifted the role of the middle class and their attitudes, lifestyles, and consumption practices. The easy availability of consumer items, such as cell phones, rising wage levels for the managerial staff of MNCs, and expanding consumer choice for goods, such as cars, washing machines, and colour television, led to the emergence of the middle-class as an economic heavyweight in India.

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New opportunities provided by the success of economic reforms contributed to expansion of the service industry, specifically IT and BT, and contributed to the rise of the salaried class of women.

Besides the emergence of a vibrant middle class with spending power, the policies gave birth to a new generation of industrialists and entrepreneurs who began to compete globally. The outcome was real GDP clocking over 8% every year since 2004, accompanied by a jump in innovation activities and start-ups.

The size of the middle class increased as the percentage of people living below poverty line declined from 37% in 2004-05 to 22% in 2011-12. Many people joined the aspirational class owing to the UPA’s policy of ‘reforms with a human face’, and inclusive policies, such as Food Security Act and Employment Guarantee Act, which were designed to protect the poor.

With the change of government in 2004, the World Bank too adopted ‘structural adjustment reforms with human face’ in its 2004 and 2008 policies, and began lending to ‘lagging’ states, such as Uttar Pradesh, Bihar, Madhya Pradesh, Odisha, and Rajasthan.

Veteran and former The Hindu journalist Harish Khare, who served as the media adviser to the PM’s Office from June 2009 to January 2012, in his book, said the middle class had enthusiastically voted for Manmohan Singh in 2009.  

A couple of political scientists said that the credit for swelling the ranks of the middle class should go to the two terms of UPA regime under Manmohan Singh, which pursued economic liberalisation, opening up new opportunities to raise the income levels of the aspiring families. The middle class, which started expanding, also began pushing the politicians to embrace economic liberalisation and globalisation.

But the Congress appears to have failed to tap the middle class sentiments, which the BJP and current Prime Minister Narendra Modi used to their electoral advantage in the 2014 Lok Sabha elections. The alleged ‘policy paralysis’ of the UPA-II government during its last years of rule apparently caused discontent among the middle class, which supported the India Against Corruption (IAC) movement. The middle class that was the product of the policies of the Congress, apparently caused the defeat of the grand old party in 2014, and in subsequent Lok Sabha elections.