How big is India's middle class?

As many as one in three of India’s vast population can be described as middle class, according to an Udaipur research firm.

Why it matters 

Calculating the size of the Indian middle class is not a straightforward task, with many people not earning enough to pay tax or working in the informal sector. In a population of 1.425 billion, according to the latest UN figures, just 58 million individual tax returns were filed in 2021-22. But the middle class, with its spending power, is a crucial target market for brands seeking to grow.

Takeaways 

• Figures from People Research on India’s Consumer Economy (Price), a not-for-profit research firm based in Udaipur that conducts household income surveys, put the total middle class at 432 million.
• But that encompasses a wide range of household income – between 500,000 and 3,000,000 rupees (or from $6,700 to $40,000) a year. Rajesh Shukla, chief executive of Price, says that is enough to “have achieved economic security and be able to indulge in discretionary consumption”.
• A potentially significant group is “aspirers” – those people whose annual household income is just below 500,000 rupees a year and who could soon be moving into the middle class.

Key quote

“The biggest shift will be the move upward of the ‘aspirers’ into the middle class — people who buy not just more of the same, but also more premium and newer categories” – Nikhil Ojha, senior partner with Bain & Co, speaking to the Financial Times.

Sourced from Financial Times