Middle Class: 6 Crores Added in 15 Years, 7 Crores to be Added in 10 Years

Rajesh Shukla    January 5, 2025

OPINION I Dainik Bhaskar

Is the country’s middle class shrinking? This question has sparked a debate across the nation. Amid this, a survey conducted by PRICE (People’s Research on India’s Consumer Economy) covered 216 districts, 1,287 villages, and 487 cities, surveying three lakh families.

According to PRICE, the middle class in India is expected to grow to 16.5 crore by 2030. This number was 9.1 crore in 2020 and 3 crore in 2005. However, the lower-middle class population is projected to decline from 6 crore to 4.7 crore in the next 10 years. Think tank has placed people with annual income of Rs 5-30 lakh in the middle class. Let us tell you that in the second round of the survey, 61 thousand other families were also surveyed. This includes 25 thousand rural and 36 thousand urban families.

Consumers who are earning more as per the price are now buying new products. The demand for premium products which were limited to the upper middle class is now increasing rapidly among the middle class as well. The total consumer demand in the country is growing at the rate of 10.7% annually. This means that there will be an additional consumption of Rs 30,000 crore every year in the next 6 years. The demand for luxury products is not limited to cities only. They are also in demand in small tier-3 to tier-4 cities. Premium luxury cars are reaching smaller towns. People here are buying high end phones from Apple and Samsung. Nielsen report says that the growth rate of expensive smartphone sales is 1.3% in tier 1 cities and 13.5% annually in tier 2, tier 3 and tier 4 cities. Sales of premium TV sets are growing at a rate of 7.7% in tier 1 cities and 7.6% in smaller cities. Sales of washing machines are growing at a rate of 5.1% in tier 1 cities and 8.8% in smaller cities.

The biggest reason for this is that government schemes like free food grains, MNREGA and Housing for All have increased the purchasing power of people in rural areas. According to the report, consumer spending in the country will cross $5 trillion (Rs 438.60 lakh crore) in 2030-31. Middle class families will contribute 47% to this. Currently, this share is 45%.

Rich Will Triple… Poor Will Reduce by Half… Lower Middle-Class Population Will Decline

  • According to Data Think Price, in 2005, the number of rich families in the country with an annual income of more than Rs 30 lakh crore was 20 lakhs. In 2020, it increased to 1.1 crore. In 2030, this number will increase to 3.5 crore.
  • The number of lower middle-class families earning between 1-5 lakh rupees was 12.1 crore in 2005. It increased to 16.1 crore in 2020. It will increase to 13.6 by 2030.
  • The number of poor families with annual income up to Rs 1 lakh has increased to 6.6 crores. In 2020, this figure has come down to 4.5 crores. By 2030, their number will be reduced to 2 crores.
  • In 2005, the total number of families in the country was 21.9 crores. In 2020, it increased to 30.8 crores. By 2030, it will reach 35.6 crores.

If we add inflation rate then income brackets will increase by 30-40%

PRICE has calculated the income of each category on the basis of the prevailing prices of 2020-21. After this, after adjusting the annual inflation rate in 4 years, the income of families included in all categories will be 30-40% higher on the basis of current prices. After the change in the base year, a large number of families will shift to the upper bracket. The next base year will be decided after 10 years. The most important thing is that till then the number of poor people may remain almost zero.

Trickle effect means every class is getting upgraded and moving up

According to PRICE, Indian families are upgrading. In 15 years, 2.1 crore families came out of poverty. They reached the lower class or middle class. Similarly, rich families increased the most. People with family income of more than 30 lakh are considered rich. Their number more than tripled in three years. During this period, the middle class also increased by 81.31%. Families with income of 1-5 lakh, who were considered lower class, these families will also decrease by 2.5 crore in six years. That means, in 6 years, a total of 7.1 crore low income poor and lower middle class families will enter the middle income and rich class. In the language of economics, this is called "trickle effect".

Therefore the middle class will prosper... Income will increase from the new generation

According to the think tank, prosperity in the middle class will come from growth in existing businesses, service sector and agricultural income. A new generation comes into the family of a chartered accountant or a lawyer. They start their own business. The family income increases. The same is the case with business and working families. The new generation also joins the job along with the parents. The scope of income increases. The new generation of farmer families increase their income by doing other businesses. Their family income increases in the calculation. However, the contribution of new jobs in increasing income is limited. The reason is that this class has to bear the maximum impact of inflation and costly living in cities. Therefore, they are able to make a small contribution to t

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