World Economic Forum report says in the next 11 years, less than 5% of Indian households will lie below poverty line.
New Delhi: India will be a middle-class-led economy by 2030, with consumer spending levels expected to quadruple in the next 11 years, the World Economic Forum has said in a report.
With more than three-fourth of Indian households expected to be in the middle-income categorisation by 2030, consumer spending will quadruple to Rs 420 lakh crore from the current Rs 105 lakh crore, making India the third-largest consumer market, a report titled Future of Consumption in Fast-Growth Consumer Markets: India said.
The middle-class expansion, reflected by an addition of 14 crore households and the emergence of a sizeable high-income segment with 2.9 crore households, will drive consumption in the coming years, the report said.
Another positive for India is that poverty elimination is becoming a reality, the report said.
“India will lift nearly 25 million (2.5 crore) households out of poverty; less than 5 per cent of households will lie below the poverty line by 2030, down from 15 per cent today,” it said.
Low-income households are classified as those having an income of less than $4,000, lower-middle class are those with income between $4,000 and $8,500, upper-middle class as those with income between $8,500 and $40,000 and high-income households as those with income more than $40,000.
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Kerala, Delhi to show the way
The Indian states that will lead the income and consumption trend will be Kerala, Karnataka, Andhra Pradesh, Telangana and Tamil Nadu in the south; Delhi, Haryana and Punjab in the north; and Maharashtra and Gujarat in the west, the report said.
In geographical terms, the report also said that with greater urbanisation, rural towns will mimic their urban counterparts in their consumption patterns.
It estimates that with nearly 24 crore consumers in 2030, developed rural towns will represent a large but dispersed Rs 84 lakh crore consumption opportunity with a share of 20 per cent in the total consumption.
Profile of the Indian consumer
Upper-middle-income households will drive 47 per cent of the total consumption and the high-income households another 14 per cent as against the current 30 per cent and 7 per cent, respectively.
Going by consumer archetypes, the millennials account for 7 per cent of consumption today. Seven in 10 millennials are online and more than half own a mobile phone and spend on brand apparels, making them an attractive segment whose share is likely to expand in the future.
The sophisticated rich, characterised by high income, well-educated and tech-savvy millennials, have the largest share in consumption at present at 30 per cent, followed by the conservative rich at 18 per cent who are older and prefer the traditional offline purchasing.
The rural poor, who constitute 29 per cent of India’s population, have a mere 11 per cent share in total consumption and spend mostly on food and purchase of a few durables.
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