'Focus on cheaper products'

Producers should focus on low-priced products for the masses rather than on trying to capture the elusive Indian 'middle class', which is anyway negligible compared to developed countries, said noted demographer Ashish Bose.

"Compared with the global standards, the much hyped Indian middle class was an insignificant segment," Bose said, adding that in India anyone who owned a fridge was a rich man, while in the developed world even a janitor would own one.

So, rather than trying to sell lifestyle products at high prices, producers should focus on low-priced products where high volume sales would make up for the lower margins.

"Instead of cultivating the 'middle class', we must cultivate the lower middle class, which will provide more dynamism to the economy," he said.

The results of the Houselisting Operation, 2000 show that in urban areas, televisions constitute the major asset, while in rural areas, it is the cycle.

Bose said: "The demand for televisions is not linked to the income. The old theory that the demand for better quality of food increased with increase in incomes no longer held. Now, even the poor save in order to own a television." The same holds for other assets covered in the census. Only 31.6 per cent of households own televisions.

The proportion is as low as 18.9 per cent in rural areas, indicating that there is a huge potential market for cheap televisions.

Producers should focus on adapting products for the domestic market. For instance, there was a huge market in small towns for cycles and mopeds adapted for women, he said.

Even in the case of services like hospitality, the huge market for the middle class - domestic or international - is left unexploited.

For instance, there are negligible numbers of two or three star hotels in the tourism circuit catering to the low income foreign tourist.

Bose added that there was a tremendous market for this type of accomodation.