How is the growth of Tier 2 cities related to the rise of a new middle class with an emphasis on the culture of consumption? (150 Words) (10 Marks)

UPSC Mains General Studies Paper – 1 Mains 2022
Factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world including India.

UPSC Mains Civil Services IAS Exam Question Paper – 2022

Table of Contents

Approach:

Introducing with keyword Tier 2 cities and present with the great divergence of culture
Briefly speculate the reasons for the rise of the middle class in Tier 2 cities.
Explain the amalgamation of diversified culture with socio-economic development.
Accordingly, conclude it.

Introduction:

As per the government, cities having a population size ranging between 50,000 and 1,00,000 are categorised as tier 2 cities in India. The growth of Tier 2 cities in India is closely related to the rise of a new middle class with an emphasis on the culture of consumption. These cities are typically smaller than Tier 1 cities, but they are rapidly growing and developing as a result of increasing industrialization and urbanization.

Body

India’s 63 biggest cities are now home to more than a quarter of its middle class. They also generate 29% of the country’s disposable income driving demand for goods and services, fuelling an economic boom,

The LPG era increased entrepreneur activity leading to a significant expansion of white–collar jobs in tier 2 cities.
Globalization led to the rise in the service sector which contributes more than 50 % to India’s GDP and more than 64% of jobs in the tier 2 and tier 3 cities.
The digital revolution, increased incomes, and westernization of habits under Globalisation: helped in the promotion of popular culture and changed the consumption habits of this class.
Government efforts: Make in India, Stand-up India, Start-up India, MUDRA Yojana, JAM trinity, UDAN, etc. are expected to bring more people into the fold of the ‘new middle class ‘.
This new middle class is characterized by their increased purchasing power and their desire for a better quality of life, which includes better housing, education, healthcare, and leisure activities.

Tier-II Indian cities emerge as major realty growth engines:

Attractive options for larger firms: tier 2 cities like Agra Amritsar Banaras, Cuttak, Dhanbad, Jaipur, Ranchi, Rourkela, Bhubaneswar, Patna, Indore, Vijayawada, Visakhapatnam, and Surat have recorded economic growth rate of over 40%,
Disposable income increased: By 2030, 80% of households will be middle-income leading to an increase in Disposable income.
Value for money is an important factor in determining consumer behaviour in India.
New to E-commerce: There are over 15 million traditional “Kirana” stores in India – 88% of the retail market. Many families visit every 2-3 days to stock up on fresh produce.
Mobilizing the potential workforce from rural areas.
Moderate cost of living in tier II cities: a better lifestyle leads to more consumption.
This new middle class also places a strong emphasis on the culture of consumption, as they are more interested in buying and owning products that reflect their social status and lifestyle. This has led to an increase in demand for consumer goods, including luxury items, fashion, electronics, and cars.

Conclusion:

This trend is reshaping the economic and social landscape of many countries and is likely to have a significant impact on future trends in consumer behaviour and business strategies.