Economic Growth

6 surprising facts about India’s exploding middle class

Vehicles move along New Delhi's Connaught Place during evening hours, October 28, 2014. India has the world's deadliest roads, the result of a flood of untrained drivers, inadequate law enforcement, badly maintained highways and cars that fail modern crash tests. Alarmed by the increasing fatalities, the new government has begun a five-year project to cut road deaths by a fifth every year, part of the most ambitious overhaul of highway laws since independence in 1947.?Picture taken October 28, 2014. To match Feature INDIA-DRIVING/    Picture is taken using slow shutter speed. REUTERS/Anindito Mukherjee (INDIA - Tags: TRANSPORT SOCIETY CITYSCAPE) - RTR4COPC

Middle class now includes carpenters, street vendors, decorators and drivers, amongst others Image: REUTERS/Anindito Mukherjee

Keith Breene
Senior Writer, Forum Agenda

India is the world’s fastest-growing large economy, having outpaced China over the past year.

At the same time the population is growing rapidly. By 2022, India’s population will have overtaken China’s to become the largest in the world, according to a United Nations report.

The middle class is growing at breakneck speed and will one day overtake the rest of the world too.

It has doubled in size

A new study says the Indian middle class doubled in size over an eight year period from 300 million in 2004 to 600 million in 2012.

Economists at Mumbai University defined middle class as people spending anywhere between $2 and $10 per capita per day.

Half the population are now middle class

By this definition, half of the country’s population of 1.2 billion are now middle class. The biggest growth is in those in the lower middle class classification who spend between $4 and $6 per day.

Street vendors are middle class

Another Mumbai University study says that the middle class now includes carpenters, street vendors, decorators and drivers amongst others. The majority are in sectors with low barriers to entry meaning that in theory anyone can work in them and pull themselves out of poverty.

Occupational structure of India's lower middle class
Image: Atlas

Since 1990, households with high disposable income have risen twenty-fold.

The number of households with a disposable income of more than $10,000 has leapt from around 2.5 million in 1990 to nearly 50 million in 2015, according to Euromonitor International.

 Number of households in India with disposible income over US$10,000: 1990-2015
Image: Euromonitor International from national statistics/UN
Have you read?

India will have more middle class people than any other country

India’s middle-class growth is predicted to accelerate.

From 2027 India’s population is set to overtake China’s and the middle class will overtake that of the United States, Europe and China.

The global middle-class wave
Image: H, Kharas

Household savings have tripled

Indian household saving rates have also leapt. In the eight years from 2005 they virtually tripled as more were lifted out of poverty and found themselves with disposable income for the first time.

 India Households Savings
Image: Trading Economics
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Stay up to date:

Social Protection

Related topics:
Economic GrowthGeographies in Depth
Share:
The Big Picture
Explore and monitor how Social Protection is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Global public debt to exceed $100 trillion, says IMF - plus other economy stories to read this week

Rebecca Geldard

October 21, 2024

Can the European Union get it together on capital markets? This is what’s at stake

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum