“By 2047, if political and economic reforms have the desired effect, India’s income pyramid will have a smaller stratum at the bottom that includes destitute and aspiring groups, a huge swelling of the middle class and a large stratum. creamy ‘rich’ on top, ”says Rajesh Shukla, MD and CEO of PRICE and author of the report entitled: “The Rise of India’s Middle Class”. In 2021, the middle class accounted for 31%, which is expected to expand significantly in the years to come.
Shukla says that while much has been written about this class, defining this enigmatic “medium” has always been problematic for academics and marketers alike. The lack of a universally acceptable definition, coupled with the well-known problems associated with the survey data, has led to varying estimates of its numerical estimates, says the economist who has closely followed the matter.
“Given that estimates range from 50 to 400 million, many question their actual strength and therefore the purchasing power of this category,” he says. The report broadly grouped these groups into seven categories, ranging from the “destitute” (those with an annual family income of less than Rs 1.25,000 or $ 1,700 in 2020-21) to the “super rich” (annual family income of over Rs. 2 crore or $ 270,000 in 2020-21) with the middle class (annual family income between Rs 5 lakh and Rs 30 lakh or $ 6,700- $ 40,000) in between.
“The reason families hang out in this way is that distinct consumption patterns can be observed for these categories,” says Shukla.
The survey results showed that the “destitute” family hardly ever buys a car. Less than five out of 10 “wannabe” families had a car in 2020-21.
In the “prospectors” category, with an income of between Rs 5 lakh and Rs 15 lakh per year, nearly three out of 10 families own a car. In the “rich”, or those with an annual family income of over Rs 30 lakh, each family owns a car. In the category of “crorepati” there are almost three cars per family. Similarly, in the case of air conditioners, while the “poor” families do not have any, the “aspiring” two in 100 and about half of the “super rich” do, according to the survey.
The report, based on pan-Indian surveys, provides an overview of the country’s income demographics by states, urban and rural areas, and geographic clusters within each of the eight income categories. It also details the rise of India’s wealthier cities and classes and explains how these cities are home to an increasing number of wealthy Indians. It also covers the rise of 63 cities that have populations of over one million each and how the concentration of the rich in cities has increased from 2015 to 2016 and chronicles the demographic change in income.
The report showed that Maharashtra is the richest state with 6.4 lakh of super rich families earning over Rs. 2 crore per year in 2021. Delhi was second with Rs 1.81 lakh households, Gujarat third with 1.41 lakh, Tamil Nadu fourth with 1.37 L and Punjab fifth with 1.01 lakh households, according to the survey results. .
It showed that the number of “super rich” rose from 98,000 in 1994-95 to 1.8 million households in 2020-21. Surat and Nagpur have the highest growth in the high-income segment.