Ten million dollars to allow Justin Bieber to travel to Mumbai, the financial capital of India, for an evening performance.
An 800-passenger cruise around the Mediterranean costing $150 million.
A wedding ceremony with hundreds of guests and a price tag of over $600 million.
These are just a few of the many figures circulating in speculative and poorly researched reports about how much India’s richest man may have spent on his youngest child’s wedding celebrations.
Anant Ambani, son of tycoon Mukesh Ambani, married his longtime girlfriend Radhika Merchant in a lavish ceremony held from July 12 to 14 that set tongues wagging in India and beyond.
Ambani Sr., chairman of conglomerate Reliance Industries, has an estimated net worth of $120.3 billion, making him the 11th richest person in the world, according to Forbes.
If true, the reported wedding price tag, estimated at $600 million, would be equivalent to 0.5% of Ambani’s estimated wealth.
While weddings in India are typically lavish events – with people from all income brackets often spending beyond their means – the opulence of the Ambanis’ celebrations has drawn attention to the growing wealth divide in the South Asian country.
While India’s rich are getting richer, most Indians, including the middle class often held up as the country’s economic success story in recent years, are barely getting by.
According to a report released by Oxford Economics in May, Indian consumers have much less purchasing power than China, another booming economy. The country’s middle class is heavily concentrated at the lower end of the income scale.
At about 460 million, India’s middle class has grown tenfold over the past three decades. But it is still less than half that of China, according to Oxford Economics, even though the two countries have similar populations of about 1.4 billion people.
By 2022, at least 660 million Chinese adults earned more than $10,000 a year, while only about a quarter of Indians earned that much, the report said.
Economist Thomas Piketty has described India as a country lacking a “middle class.”
By 2022, average middle-class incomes in India were less than a third as high as in China, despite starting from a similar base in the 1990s, according to Oxford Economics.
According to Oxford Economics, the middle 40% in China earned an average of $30,400 before taxes in 2022, compared to $8,700 for their Indian counterparts.
“One of the reasons behind the relatively faster growth of China’s middle class is probably its relatively rapid urbanisation,” Alexandra Hermann, chief economist at Oxford Economics, told Al Jazeera.
In China, government policies have been successful in encouraging migration from rural to urban areas, Hermann said.
India, however, faces a series of challenges that make Indians less able or less willing to migrate.
One of them is ease of movement.
Large distances, combined with limited transportation infrastructure and strong language differences between states, complicate internal migration, Hermann said.
The other problem is the lack of social protection, which pushes poor Indians to want to stay close to the caste networks that provide them with some of this support informally.
India’s middle and lower classes have shrunk after the COVID-19 pandemic, despite the country’s strong economic recovery, said Michael Kugelman, director of the South Asia Institute at the Wilson Center.
These classes are also “deleteriously affected by recent inflation” – which was running at around 5.08% in June, up from 4.75% the previous month – Kugelman said, adding that “significant” inflation and the ongoing challenge of unemployment have hurt this part of the country.
“Unemployment disproportionately affects young people in India, and since the country is demographically dominated by young people, there will naturally be many people in the lower and middle classes who will be affected,” Kugelman told Al Jazeera.
India also has state-level welfare programmes that act as a barrier to rural-urban and interstate migration, Hermann said.
Growing India’s middle class will require a shift in income distribution, overall income growth, or a combination of the two, Hermann said.
“In India, progress on various reforms aimed at creating jobs outside agriculture will be critical to raising incomes overall and unlocking people’s purchasing power,” she said.
