According to a recent report by U Grow Capital, India is poised for a substantial increase in household wealth, with an estimated 11.3 crore households projected to earn over Rs 30 lakh annually by the financial year 2031.
This growth marks a critical shift in Indian economic landscape, as the number of middle-class households-those earning between Rs 5 lakh and Rs 10 lakh per annum-is also expected to rise significantly, by 28.3 crore in the same timeframe.
The report outlines that from FY21 to FY31, the number of affluent households (with annual incomes exceeding Rs 3 million) will surge by 113 million, while middle-class households (earning between Rs 0.5-1 million) will expand by 283 million. This growth trajectory is underpinned by a favourable macroeconomic environment, characterized by consistent annual growth rates exceeding 7% over 16 of the past 30 years.
Key indicators reflect this resilience: India’s core inflation has reached a four-year low in FY24, the current account deficit has turned into a surplus, and the gross non-performing assets (GNPA) ratio has dipped to a multi-year low of 2.8% as of March 2024. These factors contribute to a solid foundation for sustained income growth across Indian households.
Additionally, India’s external sector remains robust, with improving vulnerability indicators, positioning the nation to surpass Germany in GDP by 2027. The report emphasized that India’s role in the global economy is set to expand significantly, with its contribution to world GDP expected to double between 2009 and 2029.
Looking ahead, per capita GDP in US dollars is projected to double by 2029, which will further enhance consumption and spending among Indian households. This rise in per capita income presents new opportunities for businesses as consumer demand escalates across various sectors.