India's 'affluent' class to reach 100 million by 2027, says report
Strong economic growth, stable monetary policy and high credit growth have enhanced the purchasing power of Indians, it said
The number of affluent Indians, who earn above $10,000 (Rs 8.28 lakh) a year, is expected to touch 100 million by 2027, stated a report by Goldman Sachs released on Friday.
As per the report, strong economic growth, stable monetary policy and high credit growth have enhanced the purchasing power of Indians over the past decade. Consequently, the number of affluent Indians who earn above $10,000 (₹8.28 lakh) a year has registered a massive increase from 24 million in 2015 to 60 million now. It will further increase by a whopping 67% to 100 million over the next three years, said the report.
India, currently, the world's fifth largest economy, is set to become the third largest by 2027, as per the International Monetary Fund.
Spending power up
The indigenous companies selling premium goods will outperform the broad-based rivals, said the report. “India has witnessed rising spending power among the middle class which benefits firms with premium brands in leisure, jewellery, out-of-home good and healthcare,” Bloomberg cited the Goldman report as saying.
The significant surge in value of financial and physical assets in India in the past three years has resulted in increasing wealth. “The increase has been the largest for equities and gold, while property prices have seen a higher rate of appreciation in the last three years,” it said. “There has been a drastic shift in households investing in equities via direct stocks or mutual funds over the last five years,” the report added.
Rise in demat accounts
The Goldman Sachs cited that the divide between the spending power of the top earners and middle income groups remains the issue in India. “More than 96 crore debit cards have been issued in the country and 9.30 crore Indians have postpaid cell phone connections. But only 3 crore Indians can afford a vehicle,” the report added.
The report also points to a 2.8 times jump in demat accounts to 114 million in 2023, and the increase in stock ownership (BSE 200 stocks) and mutual fund investment. Value of gold held by Indians rose by a huge 63% to $1.8 trillion between 2019 and 2023.
