India’s middle class is on the cusp of an unprecedented transformation. As the country approaches its centenary of independence in 2047, more than a billion Indians will belong to this economic segment, redefining its socio-political and financial landscape. This report examines the rapid expansion of India’s middle class, the aspirations driving its consumption patterns, and the challenges it faces in an evolving economy.

1. 1
How India’s Middle Class is Shaping Tomorrow
Rising To
A Billion

2. 2
Morethan1billionpeoplewill
make up the Middle Class
when India turns 100.
I
ndia's Middle Class is growing rapidly,
outpacing every other segment of the
population. Between 1995 and 2021, it
expanded at an impressive 6.3% annually,
now making up 31% of the population.
But that’s just the beginning—by 2031,
this figure is projected to climb to 38%,
and by 2047, a staggering 60% of Indians
will proudly call themselves Middle Class.
When India celebrates its 100th year of
independence, over a billion people will
belong to this vibrant, aspirational group.

3. 3
Defining the Indian Middle Class:
The Middle Class is often referred
to as the ‘Bird of Gold’
T
he Middle Class refers to a class
of people in the middle of a
social hierarchy, often defined by
occupation, income, education, or social
status. India’s Middle Class is defined by its
economic parameters and socio-cultural
characteristics, which set it apart both
domestically and globally.
As per ICE 360° surveys, households
earning between ₹5 lakh and ₹30 lakh annually
(at 2020-21 prices) belong to the Middle Class.
This group spans a broad spectrum, from
'Seekers' (earning ₹5–15 lakh) to 'Strivers'
(earning₹15–30lakh). Each subgroup exhibits
distinct consumption patterns, savings
behaviour, and aspirations.
1

4. 4
Who is Middle Class?
If your monthly income is more than `25,000
you're earning more than 90% of India.
`120,000
100,000
80,000
60,000
40,000
20,000
0
10
`4,600 `6,700
`9,500 `14,900
Top 5%
`64,380
Source: World Inequality Database 2021
Income Percentile
Top 3%
>`1,00,000
20 30 40 50 60 70 80 90 100
Monthly
Income
`3,70,000

5. 5
Once a symbol of comfort, being Middle
Class now feels more like a financial
balancing act. Rising costs and stagnant
wages have reshaped the definition of
prosperity—earning ₹1 crore today doesn’t
mean luxury, just survival with higher stakes.
Take a family making ₹12 lakh in a metro
city. On paper, they’re well-off. In reality,
they’re drowning in rent, school fees, and
medical bills, with little left to save. The rich
thrive, the poor struggle, and the Middle
Class? They’re the ones paying the price.
The Household Consumption Expenditure
Survey (2023-24) tells the story:
🔹n 40% of income goes to food
🔹n 6% to education
🔹n 6% to healthcare
🔹n 8.5% to transportation
Economist TCA Sharad Raghavan calls
for a rethink. The number of people earning
₹10 lakh to ₹1 crore jumped from 3.7% of
tax filers in 2011-12 to 16.2% in 2022-23. But
with skyrocketing expenses, their disposable
income isn’t as “rich” as it sounds.
Middle Class today isn’t about wealth—
it’s about making it to the next month.
Is This Definition Aligning with
the People?
The Middle Class Tightrope:
Why ₹1 Crore Isn’t 'Rich' Anymore

6. 6
India’s Middle Class: The Seekers,
The Strivers, and their Shared Aspirations
Let's take a closer look at the two key
segments shaping India's Middle Class—the
Seekers and the Strivers—each navigating
their own path toward financial security and
upward mobility.
SEEKERS VS STRIVERS
Seekers, earning ₹5–15 lakh annually,
have grown by 4.8%, primarily focusing
on necessities like food, education, and
healthcare, but are slowly shifting towards
lifestyle spending like tech and leisure.
Strivers, earning ₹15–30 lakh annually
have grown by 6.4%, and prioritise
quality-of-life upgrades, such as real estate,
premium goods, and advanced education
for their children. Despite these differences,
both groups share a common aspiration for
upward mobility and economic stability.
Globally, India’s Middle Class earns
between $4.11 and $23.56 per day (₹5–30
lakh annually at 2020-21 exchange rates),
aligning with international thresholds like
Milanovic-Yitzhaki’s and Banerjee-Duflo’s
definitions. These figures highlight the Indian
Middle Class’s growing economic clout,
bridging global aspirations with local realities.
THE THREE INDIAS
[1] High Income:
Above ₹` 1500 daily
[2] Middle Income:
` 700 – ` 1500 daily
[3] Lower Income:
` 150 – ` 700 daily

7. 7
TOP INCOME HOLDERS:
u The richest 1% of Indians earn an annual
income of ₹18.6 lakh or more (2021).
u The top 10% of households hold 57% of
the total national income.
u The top 1% alone holds 22% of the total
national income.
THE RELATABILITY WITH THE
MIDDLE CLASS: SELF-IDENTIFICATION
AS MIDDLE CLASS
A recent survey by the Lok Foundation,
conducted in collaboration with The Hindu,
reveals that nearly half (49%) of Indians
now identify as Middle Class. This self-
identification is more prevalent in urban
areas (56%) compared to rural regions (46%).
Interestingly, even among the lowest income
bracket, 45% consider themselves Middle
Class, just slightly less than the 48% in the
highest income group. This widespread
self-identification suggests that many
Indians associate being Middle Class with
aspirations and optimism about their future,
rather than solely based on income levels.
u Self-Identification: Nearly 50% of Indians
consider themselves Middle Class (Lok
Foundation survey).
u Reality Check: Only 2% of Indians qualify
as middle-income (Pew Research), and
this number shrank from 9.9 crore to 6.6
crore in 2020 due to the pandemic.
URBAN VS. RURAL DIVIDE ON
SELF-IDENTIFICATION OF MIDDLE CLASS:
u Urban: 56% self-identify as Middle Class.
u Rural: 46% self-identify as Middle Class.
ASPIRATIONAL IDENTITY:
u Middle Class self-identification often
reflects aspirations rather than material
realities.
u The group drives policy, consumption,
and development in India.
These insights highlight how Middle
Class identification is shaped by aspirations,
education, and social mobility rather than
strict income brackets.
INDIAN POPULATION
SELF-IDENTITY AS 'MIDDLE CLASS'
Lowest Income 45%
Lowest Middle Income 47%
Upper Middle Income 54%
Highest Income 45%
POOR
LOW INCOME
MIDDLE INCOME
UPPER
MIDDLE INCOME
HIGH
INCOME EARN MORE THAN
`1,500 PER DAY
`700 TO `1,500 PER DAY
`150 TO `700 PER DAY
`150 PER DAY

8. 8
I
India's Middle Class is rapidly expanding
and reshaping the economic landscape.
By 2047, Middle Class households, earning
₹5–30 lakh annually, will form 61% of the
population. States like Uttar Pradesh, West
Bengal, and Andhra Pradesh are witnessing
faster Middle Class growth than traditionally
wealthier states. Notably, rural India will
drive over 55% of incremental consumption
by 2031, highlighting the growing economic
power of smaller towns and villages.
2
From Big Cities to By-lanes:
India’s Middle Class
Redefining the Game!

9. 9
Cities are Changing Fast
Mumbai
Delhi
Pune
Kolkata
Chennai
Nagpur
Ahmedabad
Surat
Nashik
Bengaluru
52
32
26
24
20
16
16
13
173
118
269
180
88
52
43
39
35
31
27
24
2015-16 2020-21 Growth (%)
9.2
8.7
10.9
10.3
11.2
9.9
11.7
14.1
11.7
13.1
1
3
4
2
More than half of metros, boom
towns, are in the Middle Class
Share of households in different
income classes
Middle Class growth
concentrated in
smaller cities
Top 10 cities in growth rate
of Middle Class households
Nearly two-thirds of Delhi, Chennai is
Middle Class
Income distribution in selected cities
(% share of households)
CATEGORIES
BY ANNUAL
FAMILY INCOME
AVG. ANNUAL GROWTH IN
MIDDLE CLASS HOUSEHOLDS
(2015-16 TO 2020-21)
Source: The Rise of the
Middle Class, PRICE
TYPE OF CITY
Most super rich in Mumbai,
biggest increase in Surat
Top 10 cities for number of super rich
households (in thousands)
With 27.6 lakh households, Delhi has the
largest Middle Class, followed by Mumbai
at 24.4 lakh, and Kolkata and Chennai at
about 16 lakh each.

10. 10
Regional Wealth Concentration
Maharashtra leads India’s super-rich count
with 6.48 lakh households earning over
₹2 crore annually, followed by Delhi (1.81
lakh) and Gujarat (1.41 lakh). Together with
Tamil Nadu and Punjab, these states host
nearly half of India’s super-rich. Meanwhile,
poorer states like Bihar and Odisha, while
still holding 56% of destitute households, are
seeing significant growth in rich households,
reflecting their emerging economic potential.
8
6
Destitutes
15
38
28
7
Aspirers
14
11
20
23
25
7
Seekers
16
18
24
15
19
7
15
12
21
22
23
7
Strivers
22
19
25
13
16
7
Near
Rich
26
20
24
11
13
7
Clear
Rich
31
20
23
10
10
6
Sheer
Rich
36
21
21
8
9
5
44
22
18
7
5
4
Super
Rich
Total
Western Northern Southern Eastern Central North Eastern
(Figures in per cent, 2020-21)
WHERE THEY LIVE - ZONAL COUNCILS
Source: ICE 360 Survey (2021), PRICE

11. 11
MONEY MOVES: NO CITY LIMITS FOR
INDIA'S NEW RICH
The growth of Middle Class and super-rich
households is no longer just an urban story.
Rural regions are seeing a notable rise in
super-rich households, signaling a spread of
prosperity across India. By 2031, rural areas
are projected to drive 55% of incremental
consumption, highlighting their growing
economic importance.
THE GREAT INDIAN MONEY WAVE
India’s income landscape is seeing a
remarkable transformation, with higher-
income households growing rapidly between
2015-16and2020-21.Thesuper-rich(₹20lakh+)
are leading the charge, growing 14.7%
annually in Central India and 12% in the
South. The sheer rich (₹10–20 lakh) aren’t far
behind, growing at over 10% across all zones,
highlighting a surge in affluence.
On the flip side, the destitute class
(below ₹1.25 lakh) is steadily shrinking, with
the largest decline of -1.6% in the North-East.
The middle-income groups like seekers (₹5-
15 lakh) and strivers (₹15-30 lakh) are also
making strides, particularly in Central India,
where growth hit 6.2% and 7.7%, respectively.
These numbers paint a vivid picture of
India’s economic progress, with regions
showing distinct growth patterns.
GROWTH IN NUMBERS OF HOUSEHOLD IN DIFFERENT
INCOME CLASSES BY ZONAL COUNCILS
(Annual growth between 2015-16 and 2020-21)
Consuming Income class
class (` ’000 at
2020-21 prices) Southern Western Northern Eastern Central Total
Destitute <125 -1.3 -1.1 -1.3 -0.3 0.0 -1.6 -0.6
Aspirers 125-500 -0.1 0.0 -0.2 1.5 1.2 0.2 0.6
Seekers 500-1500 4.0 3.9 4.1 6.2 5.9 5.2 4.8
Strivers 1500-3000 6.1 5.8 5.6 7.6 7.7 7.0 6.4
Near Rich 3000-5000 7.2 6.8 6.5 8.6 8.9 8.1 7.4
Clear Rich 5000-10000 9.5 8.9 8.4 10.6 11.2 10.3 9.4
Sheer Rich 10000-20000 10.5 9.7 9.2 11.4 12.8 11.4 10.2
Super Rich >20000 12.0 10.8 10.4 12.4 14.7 13.1 11.3
Total 1.4 1.8 1.9 2.0 2.1 1.7 1.9
North-
Eastern

12. 12
From Pyramid to Diamond: The
Indian Middle Class is Shaping
Tomorrow's Economy
India's demographic shift is transforming from an inverted
pyramid to a diamond shape, highlighting the burgeoning
Middle Class. It foresees a diminutive layer at the
bottom comprising the destitute and aspirer groups,
followed by a substantial bulge representing the
Middle Class. At the apex of this pyramid lies a
substantial “rich” layer, indicating the nation’s
growing prosperity.
200MN
INDIANS
(AN AVERAGE)
$5,000 $15,000
MN
INDIANS
800
(AN AVERAGE)
IN 240 TIER 2/3 DISTRICTS
$2,100 $6,000
MN
INDIANS
400
(AN AVERAGE)
$1,000 $3,000
India's Middle Class - Growth Rate
Source: People Research on India's Consumer Economy
PROJECTED TO BE
60% OF POPULATION
14%
OF POPULATION
2004-05 2021-22 2047
31%
OF POPULATION
TOP PER CAPITA
MIDDLE PER CAPITA
BOTTOM PER CAPITA
IN PPP TERMS
IN PPP TERMS
IN PPP TERMS
TO
P
B
OT
TO
M
M
I
DDL
E

13. 13
By 2030, the Middle Class is projected
to encompass 46% of households, up from
30% in 2020-21. Concurrently, destitute
households (annual income less than ₹1.25
lakh) are expected to decrease from 8.9%
to 5.6%, and aspirer households (₹1.25 lakh
to ₹5 lakh) from 52% to 38%. The affluent
segment is also on the rise, with rich
households increasing from 3.5% to 10%. This
evolving structure signifies a more balanced
income distribution, with a substantial Middle
Class poised to drive India's economic
growth and social development.
For India, income distribution is
closer to a top-heavy polygon
than a pyramid.
2005
219M
2018
293M
2030/31 forecast
356M
1M (1%)
16M (7%)
8M (3%)
35M (10%)
165M (46%)
97M (33%)
61M (21%)
51M (23%)
20M (6%)
127M (43%)
136M (38%)
151M (69%)
High-income and upper
middle-income segment
• One in four households
today
• More than one in two
households by 2030/31
• Consumer spending
rising from US$1.9 trillion
to nearly USS5.2 trillion
by 2031
• Rural India will drive 55%
of the incremental
consumption in 2031
Proportion of households by income segment
• High • Upper-middle • Lower-middle • Low

14. 14
Impact of The Growing
Middle Class.
T
he growing Middle Class and high-
income groups are changing the way
India consumes. This shift is turning
India into one of the world’s most vibrant
consumption markets, laying the foundation
for long-term economic growth. By 2030,
these two segments are projected to
contribute nearly $2.7 trillion in additional
spending. As more Middle Class households
climbtheincomeladder,expectthemtospend
more on things like clothing, communication,
transport, personal care, and entertainment.
Back in the early 1990s and into the
2000s, the rise of Middle Class households
was mostly seen in metros and Tier I cities.
But since then, urbanisation has really
picked up speed, and we’re starting to see
a noticeable increase in prosperity levels.
3

15. 15
In fact, between 2016 and 2021, the Middle
Class segment grew significantly in cities
with populations between 1 to 4 million. It’s a
trend that shows just how quickly things are
changing across India.
THE RISE OF SMALLER CITIES
India's urban growth story is shifting
dramatically from big metros to smaller
cities. In the South, Malappuram, Kozhikode,
and Kochi are leading this transformation
with exceptional Middle Class growth.
Meanwhile, cities like Raipur, Tiruppur,
Indore, Bhubaneswar, and Ranchi are
emerging as powerful economic centres.
Historic cities including Patna, Agra, and
Bhopal are experiencing their renaissance
through improved connectivity.
BEYOND THE METROS
Surprisingly, among the top ten fastest-
growing Middle Class cities, only Surat and
Bangalore represent the major metros. This
marks a significant shift in India's economic
landscape, showing how prosperity is
spreading beyond traditional urban hubs.
THE NUMBERS TELL THE STORY
According to the 2021 McKinsey report,
India's urban population will reach 600
million by 2031, making up 40% of the
total population. The report spotlights 54
emerging cities as future growth engines.
Cities like Indore and Bhubaneswar are
already showing impressive growth, with 8%
annual increases in per capita income.

16. 16
quick delivery and easy returns. They're not
just buying products—they're investing in
experiences and convenience.
This isn't your traditional Middle Class
anymore. We're seeing a group that's growing
in both size and sophistication, demanding
better services and willing to pay for quality.
It's a transformation that's redefining what it
means to be Middle Class in India.
(A) INCOME GROWTH AND ECONOMIC
CONTRIBUTION
India’s Middle Class is a cornerstone of its
economic growth, contributing significantly
to income generation, consumption, and
savings. Households earning between ₹5 lakh
and ₹30 lakh annually at 2020-21 prices form
the core of this demographic, generating
₹84.1trillioninincome,spending₹₹62.2trillion,
and saving ₹11.7 trillion in 2020-21. Despite
the smaller size of the affluent "Rich", the
Middle Class’s larger population makes it the
primary driver of India’s consumer economy.
(B) CONSUMPTION PATTERNS
Middle Class consumption spans necessities
like food, housing, and healthcare, as well as
discretionary spending on education,
technology, and leisure. While food accounts
for 51% of spending, there is an increasing
focus on quality education, healthcare, and
lifestyle enhancements. This demographic
is a significant consumer of automobiles,
consumer durables, and technological
innovations, driving India’s digital adoption
and influencing global markets.
The Indian Middle Class is writing a
fascinating new chapter in consumption.
We're looking at a massive expansion—
110 million new Middle Class households
expected between 2021 and 2030, roughly
half the size of all EU households today. It's
not just about numbers; per-capita income
has jumped from $1,400 in 2014 to $2,200
in 2022, putting more spending power in
people's pockets.
GROWING MIDDLE CLASS AND SHIFTING
CONSUMER PREFERENCES
India's Middle Class:
A New Consumer Story
(i)
Note: Household income - Low: <INR 3 LPA,
Middle: INR 3 - 30 LPA, High: > INR 30 LPA
Source: Secondary research
The Young Drivers Here's where it
gets interesting: Millennials and Gen Z are
reshaping shopping habits. 72% of Millennials
and 66% of Gen Z consumers are happy
to pay more for better after-sales service,
while 50% don't mind spending extra for

17. 17
India's Middle Class, earning ₹5–30 lakh
annually, now forms 39% of households, up
from 31% in 2021. Growing at 6.1% annually,
it is set to surpass aspirer households (₹1–5
lakh income) by 2031, becoming the core of
India's consumer economy.
CONSUMPTION SURGE:
India’s consumer spending will jump from
$1.9 trillion to $5.2 trillion by 2031, with
the Middle Class driving 55% ($1.82 trillion)
and rich households contributing 31% ($1.03
trillion). These segments will power future
economic growth.
HOW MUCH DO THEY EARN, SPEND, AND SAVE?
India's Middle Class: A Driving
Force of Growth and Change
(ii)
(Figures in ` per annum, 2020-21)

18. 18
CONSUMPTION BASKET -
FOOD VS. NON-FOOD
THE DAILY CONSUMPTION OF MIDDLE
CLASS-CONSUMPTION BASKETS
For Middle Class and rich households, non-
food expenses dominate their spending,
while food takes up a smaller share. Rich
households spend 44% on food compared
to 67% for destitute and 63% for aspirers. As
income rises, the share of food expenditure
decreases, allowing more spending on
non-food items like education and housing.
For instance, rich households allocate the
highest share to education at 8%. This
highlights the income constraint faced by
poorer households, forcing them to prioritise
essentials like food, while higher-income
groups can focus on discretionary spending.
URBAN GROWTH
By 2031, 41% of India’s population will live
in urban areas, with metros, boom towns
like Surat and Pune, and 'Developed Rural'
regions leading growth. Developed Rural
areas will account for 22% of income and
20% of spending, rivalling metros.
In terms of expenditure, the Middle Class
households spend eight times that of
Destitute households, while the Rich
households’ expenditure is nearly 25 times
that of Destitute households.
Source: ICE 360 Survey (2021). PRICE

19. 19
Are you ready for some eye-opening
insights into how Indians are spending their
money? Let’s break it down!
Here’s something interesting: if you
spend over ₹11,000 monthly in urban India,
congratulations! You belong to the top 10% of
spenders. In rural areas, that figure drops to
₹6,000. It's a stark difference, isn’t it?
Now, here’s where it gets thought-
provoking: what we refer to as "Middle India"
doesn’t reflect a true Middle Class. The
middle 40-60% of urban Indians are spending
between ₹67,400 and ₹76,000 annually,
which is just around the international poverty
line of ₹67,000 per year ($2.15 daily)!
LOOKING AHEAD, THE FUTURE APPEARS
BRIGHT!
The Middle Class (those earning between
₹5 lakh and ₹30 lakh annually) is expected
to grow from 482 million in 2020-21 to a
staggering 1 billion by 2046-47. However,
there’s a catch—spending patterns are
shifting. Rural spending growth has slowed
from 1.62% to 1.02% (2011-2023), while urban
spending has decreased from 1.85% to 1.12%.
It’s like there are two different India's
coexisting: one focuses on essentials like
education and healthcare, while the other
spends on cars and properties. Talk about a
country of contrasts!
Populating a Middle Class
in Middle India
DISTRIBUTION OF INDIANS BY MONTHLY CONSUMPTION EXPENDITURE
MONTHLY PER CAPITA CONSUMPTION EXPENDITURE (MPCE) IN 2023-24 (IN `)
0-5%
5-10%
Rural Urban
20-30% 40-50%
25,000
20,000
15,000
10,000
5,000
0
60-70% 95-100%
10-20% 30-40% 70-80%
50-60% 90-95%

20. 20
CEILING FANS AND TWO-WHEELERS
Ceiling fans are a staple for nearly every
household, with 99% ownership across all
income groups. Two-wheelers, however,
highlight economic differences—75% of
Middle Class households own one, while
ownership reaches 100% among the rich,
underscoring their role in mobility and
convenience.
Ownership of Consumer
Durable Goods
(iii)
OWNERSHIP OF CONSUMER DURABLE GOODS
REFRIGERATORS AND COLOUR TVS
Refrigerators reveal a clear income
divide—47% of the Middle Class own one
compared to 81% among the rich. Colour
TVs, however, are nearly universal, with
93% ownership in the Middle Class and
even higher among the rich, showing
entertainment's central role in Indian homes.
CARS AND AIR CONDITIONERS
Car ownership reflects economic standing,
with the Middle Class owning 58% of all cars,
far outpacing the 23% owned by the rich.
Air-conditioners, a luxury item, are owned
by 50% of the super-rich, compared to just
2% of aspirers, highlighting disparities in
comfort-enhancing appliances.

21. 21
DISTRIBUTION OF STOCK OF SELECTED CONSUMER DURABLE GOODS
DIGITAL INTERFACE
Source: ICE 360 Survey (2021). PRICE
Source: ICE 360 Survey (2021). PRICE
(Per cent share in stock, 2020-21)
DIGITAL MIDDLE CLASS
India's digital landscape is rapidly evolving,
with 93% of households owning mobile
phones—almost universal across all income
groups, from 85% among destitute to 94% for
the Middle Class and 100% among the rich.
Cable or dish TV remains popular, with 64%
of households subscribing, including 88% of
the rich and 81% of the Middle Class. Internet
access, however, reveals a divide: 70% of rich
households and 65% of the Middle Class are
connected, compared to just 39% of aspirers
and 8% of destitute. Computer or laptop
ownership is minimal, at just 8% overall,
underlining the need for affordable digital
tools to bridge gaps further.
(Per cent share in stock, 2020-21)
Destitutes Aspirers Middle Class Rich
15
52
14
52
9
3 4 5 4 6
46
10
50
17
22
6
43
30 30
39
35
58
49
23
20
44
1 9
Households Celling fan Two-wheeler Color TV Car
Refrigerator Air-Conditioner
Destitutes Aspirers Middle Class Rich Total
Computer/laptop Mobile
Cable/ Dish TV
Access Of Internet
93
100
94
90
85
64
88
81
59
43
52
70
65
48
39
8
37
13
4
2

22. 22
MEETING BASIC NEEDS
Financial comfort varies significantly across
income groups, with 48% of the Middle Class
reporting some difficulty in meeting basic
needs, highlighting their financial vulnerability
despite relatively higher incomes. Among
aspirers, 24% face challenges in fulfilling
essential requirements, while the situation
is even more dire for the destitute, with
44% struggling to meet basic needs. These
figures emphasise the persistent disparities
in financial stability across income segments,
underscoring the need for targeted support
and inclusive growth strategies.

23. 23
M for Money
M for Middle Class
S
avings and investment behaviour is
another hallmark of the middle class.
With over half of India’s household
savings, this group favours diverse
instruments, from traditional bank accounts
and gold to insurance policies and emerging
financial tools like mutual funds. These
choices reflect a mix of traditional values
and growing financial awareness. Savings
are often directed toward higher education,
wealth creation, and retirement security,
showcasing the aspirations and forward-
thinking mindset of this demographic.
4
How Does The Middle Class Man Handle His Moolah?

24. 24
SMALL TOWNS ARE
DRIVING WEALTH CREATION
India’s Middle Class is seeing a financial
revolution, surprisingly, smaller towns are
leading the charge. Data shows that assets
under management (AUM) in these towns
have skyrocketed by 3.4 times, jumping
from ₹5.9 lakh crore in 2021 to ₹12.3 lakh
crore in 2024. Meanwhile, the top 30 cities
(T30) saw a 2.6 times growth, from ₹₹21.2 lakh
crore to ₹₹54.6 lakh crore. What’s even more
interesting? Small-town investors are taking
the lead when it comes to bold investments.
While investors in big cities allocate 49.1%
of their funds to equities, those in smaller
towns are going all in, with 75% of their
money in growth-focused investments.
This shift breaks old barriers and positions
smaller towns as key players in India’s wealth
creation journey.
Small-town investors: 75% in equity
Big-city investors: 49.1% in equity
From Small Towns to Big Dreams:
India's Middle Class Investment Revolution

25. 25
SAVE KAREGA INDIA TABHI TOH
BADHEGA INDIA
Savings and spending habits vary
significantly across income groups in India.
The Middle Class typically saves around
17% of their income, striking a balance
between consumption and future security,
while aspirers save 14%. In contrast, those in
lower-income groups, such as the destitute,
save almost nothing and often rely on debt,
spending 114% of their income. Middle Class
households, on the other hand, manage to
save more by spending 83% of their income.
The wealthy, with higher disposable incomes,
save the highest proportion, at 41%, and
spend just 59% of their income, enabling
substantial financial growth and wealth
accumulation.
DECLINE IN TRADITIONAL SAVINGS
PREFERENCES - $9.7 TRILLION IN
EQUITY WEALTH
Post-pandemic, Indian households have
shifted their savings from traditional deposits
and small savings schemes to equities
and mutual funds. Equities, offering the
highest returns adjusted for inflation, have
outperformed gold, real estate, and other
assets from FY21-23. This shift has resulted
in the creation of $9.7 trillion in equity
wealth over the last decade, highlighting the
growing dominance of the stock market in
the Middle Class financial portfolio.
SAVINGS INSTRUMENTS OF THE
MIDDLE CLASS
Middle Class households prioritise traditional
savings instruments such as banking
products and life insurance policies,
reflecting their focus on financial security
and low-risk investments. Unlike the rich,
who invest significantly in gold, real estate,
and equities, the Middle Class has limited
exposure to these assets due to constrained
disposable incomes. This cautious approach
underscores their reliance on secure,
predictable savings options.
WHERE INDIAN HOUSEHOLDS SAVE (MULTIPLE RESPONSE)
(Figures in per cent, 2020-21)

26. 26
The message is clear: India's Middle Class
isn't just saving anymore - they're investing.
BANKING INSTRUMENTS DOMINATE
Across all classes, banking instruments
are the primary saving choice, with 100%
of Middle class and rich households using
them, compared to 41% among destitutes
and 57% among aspirers.
PHYSICAL GOLD AS A POPULAR ASSET
Physical gold remains a favoured saving
method for 15% of Middle Class households
and 20% of the rich, reflecting cultural and
financial security preferences.
LIFE INSURANCE POLICIES HOLD
MODERATE APPEAL
Life insurance policies attract 16% of rich
households and 14% of aspirers, with a total
of 12% across all classes.
The SIP Revolution
TOTAL NO. OF SIP ACCOUNTS
Avg. amount
invested per SIP
(in ` lakh)
(Till Aug)
FY22
528
LAKH
1.09
636
LAKH
FY23
1.07
840
LAKH
FY24
1.28
961
LAKH
FY25
1.39
The real game-changer? Look at how
SIP investments have transformed.
What started as a modest ₹3,122
crore monthly investment in 2016
has exploded to ₹24,508 crore by
September 2024. This isn't just a trend
- it's a financial revolution!
And the results speak for
themselves. Over the last decade,
Indian households have built up an
incredible $2 trillion in equity wealth.
While some still stick to traditional
gold (making up 22% of financial
wealth), it's the equity market that's
delivering knockout returns of 8-10%.

27. 27
Strategic Debt Reliance
DEBT-FREE INDIAN MIDDLE CLASS:
THREE-FOURTHS OF ALL INDIAN
HOUSEHOLDS ARE DEBT-FREE
Nearly three-fourths (73%) of all Indian
households are debt-free or have no running
loans, with the lowest percentage among
low-income earners and the highest among
top earners. For the Middle Class, however,
debt is used as a tool to improve quality of
life, particularly for housing and education.
Unlike the poor, who rely on loans to meet
basic needs, the Middle Class uses debt to
manage immediate expenses while planning
for long-term goals. In contrast, the wealthy
leverage debt to build wealth, borrowing at
low interest rates to invest in assets like real
estate and stocks. This strategy allows them
to control valuable investments with minimal
personal risk, leading to faster portfolio
growth and higher returns.
ASPECT MIDDLE CLASS RICH
Purpose of Debt Housing, education, living standard upgrades Investment, wealth building, business growth
Asset Focus Primary home, basic education Real estate, stocks, businesses
Return on Debt Often lower, tied to personal use Higher, tied to income-generating assets
Risk Tolerance Lower, cautious of default Higher, manage risk with diverse investments

28. 28
Aam Aadmi Ki Not So
Aam Adversities
GLOBAL IMPACT AND ECONOMIC CHALLENGES
C
OVID-19 and Its Impact on India's
Middle Class: The COVID-19
pandemic hit India's Middle Class
hard, shrinking it by 32 million people in
2020, which accounted for 60% of the global
decrease. At the same time, 75 million
more people fell into poverty, making up
nearly 60% of the global rise in poverty.
Rural employment programs saw a record
increase as many lost their jobs. Before the
pandemic, 99 million Indians were expected
to be in the Middle Class by 2020, but that
number dropped to 66 million by the end
of the first pandemic year. The poverty rate
also more than doubled, jumping from 4.3%
to 9.7%.
5

29. 29
While China saw a small dip in its Middle Class, India’s Middle Class took a huge hit during the
pandemic, reversing years of progress. India’s poverty rate, which had been dropping steadily,
shot up in 2020 with 75 million people falling into poverty, marking a troubling setback in
efforts to reduce poverty and grow the Middle Class.

30. 30
Challenges Faced
by the Middle Class
(A) INFLATIONARY PRESSURE
High prices, crippling tax rates along with shrinking incomes are forcing this crucial
demographic to swallow its ambitions, affecting India’s growth story.
6
Financial Challenges
(i)

31. 31
In October, India’s consumer price inflation
(CPI) hit a 14-month high of 6.2%, exceeding
the RBI’s target range of 2-6%. A major factor
was food inflation, which soared to 9.7%, with
vegetable prices jumping over 42%, the highest
in 57 months. While CPI dropped to 5.2% by
December, food inflation remained at 8.4%. At
the same time, house rents, telecom bills, and
credit costs are rising, while wage growth has
slowed significantly. In urban areas, real wage
growth in private companies has dropped from
over 10% in Q3FY23 to just 3-4% now.
"The Middle Class of the country,
the ones who offer reasonable
value in the
middle segment, is
finding its fortunes
shrinking."
- SURESH NARAYANAN
CMD, Nestle India

32. 32
(B) STAGNANT WAGES
India's Chief Economic Advisor, V. Anantha
Nageswaran, has highlighted the troubling
trend of stagnant wages despite record-
high corporate profits. A report by FICCI
and Quess Corp, accessed by The Indian
Express, reveals that while profits for Indian
companies have quadrupled over the past
four years, wages have seen negative
growth. Nageswaran stresses the importance
of boosting income growth, pointing out
that despite strong corporate earnings,
the benefits aren’t being passed on to
employees, especially in key sectors, which
is a concern for long-term economic stability
and consumer spending.

33. 33
This rise in debt has led to a decline in
household net financial savings, which
dropped sharply to 5.1% of GDP in fiscal
2023 from 11.5% in fiscal 2021, well below the
long-term average of 7-7.5%. Gross financial
savings also fell to 10.9% of GDP in fiscal
2023, reverting to pre-pandemic levels.
However, India’s household debt remains
relatively low compared to other economies.
The debt-service ratio, at 6.7% (as of
February 2024), is lower than that of the
US (7.6%), Japan (7.5%), the UK (8.5%), and
South Korea (14.2%). While the trend is
concerning, the risk of widespread debt
stress in India remains limited for now.
(C) DEBT BURDEN
The debt burden on India's Middle Class is
growing fast. Over the last decade, the share of
personal loans in gross bank credit has jumped
from 16.9% to 32.4%. In tier 2 and 3 cities, 15-20
million Middle Class individuals, mainly aged
25-40, are relying on loans to manage rising
living costs and stagnant wages.
HOUSEHOLD LIABILITIES ARE RISING QUICKLY AS CONSUMERS DIP INTO THEIR SAVINGS
Financial assets
FY2019 FY2020 FY2021F Y2022 FY2023
Financial liabilities
Percentage of GDP
18
16
14
12
10
8
6
4
2
0
Note: Financial assets include bank deposits to commercial and cooperative banks, non-bank deposits to non-banking financial companies and
housing finance companies, life insurance funds, provident and pension funds (including public provident fund), currency, and investments in
mutual funds and equity, small savings (excluding PPF).
Sources: Centre for Monitoring Indian Economy; Reserve Bank of India, "Current statistics," accessed April 12, 2024; Deloitte research.
deloitte.com/insights

34. 34
Healthcare Cost
Educational Challenges:
High Cost of Education
(ii)
(iii)
Healthcare costs in India are rising at an
alarming rate of 14% annually, according to
the ACKO India Health Insurance Index 2024.
The report also highlights that 23% of hospital
charges are financed through borrowings,
adding financial pressure on families. With
62% of healthcare expenses paid out-of-
pocket, the need for better healthcare
coverage is more urgent than ever. Before
GST, healthcare expenditure accounted for
5.6% of the average household's income, but
post-GST, this has surged by 10-15%, as per
a 2019 AIIMS report.
The cost of education in India has
been steadily increasing, placing
significant stress on families,
particularly those in middle and low-
income brackets. Recent data from
a survey by an edtech company,
Schoolnet, showed that parents are
spending 20 percent to 30 percent
of their annual household income on
education. This figure encompasses
not just tuition fees but also related
expenses such as textbooks,
transportation, exam fees, and other
hidden costs.
This burden forces families to delay or
skip critical treatments, accumulate medical
debt, and sacrifice preventive care. The
Middle Class, already squeezed, cannot bear
this strain much longer, and urgent solutions
are needed to ease their plight.

35. 35
SOURCE: HOUSEHOLD SOCIAL CONSUMPTION ON EDUCATION IN INDIA, A SURVEY CONDUCTED AS PART OF
THE 75TH ROUND OF THE NATIONAL SAMPLE SURVEY (NSS) BETWEEN 1 JULY 2017 AND 30 JUNE 2018.
THE AVERAGE EXPENDITURE PER STUDENT IN INDIA
According to the 2019 National Sample
Survey (NSS), the average expenditure
on studying medicine was ` 31,309 in
government institutions compared with a
much heftier ` 94,658 in private aided and
` 1,01,154 in private unaided institutions in an
academic year.
SADDLED WITH LOANS
A September 2024 report by Credit Rating
Information Services of India Ltd projects
that Non-Banking Finance Company (NBFC)
education loan assets under management
will grow by 40% this financial year, reaching
over ` 60,000 crore, up from ` 43,000 crore
last year. Meanwhile, RBI data reveals that
the outstanding education loan balance
surged to ` 1,29,116 crore in April-September
2024, compared to ` 65,336 crore in the
same period of 2020. The balance has been
steadily rising, reaching ` 90,858.3 crore in
2022 and ` 1,09,743 crore last year.
OUTSTANDING EDUCATION LOANS
25,852
20,804
17,360
2,181
1,253
1,030
4,078
7,001
12,834
14,485
In government institutions In private unaided institutions
25,000
20,000
15,000
10,000
5000
0
Pre-primary level Primary level Upper primary level Secondary level Higher secondary level

36. 36
Housing Affordability
(iv)
RISING PROPERTY PRICES
In the last four years, average housing prices in India
have surged by 46%, with Hyderabad and Noida
experiencing substantial increases of 78.6% and
69%, respectively. The swift surge in housing prices
post-COVID-19 has substantially diminished housing
affordability, imposing financial barriers on potential
buyers, i.e., the Middle Class.
HOUSE PRICE MOVEMENT
The increase in home loan interest rates from 7.35% in 2020 to 9.1% in 2024
signifies a notable shift in the financial landscape. Alongside rising property prices,
the consistent rise in home loan interest rates has further contributed to the
growing unaffordability of housing among the Middle Class.
Source: Margicbricks Research
2020 2021 2022 2023 2024
180
160
140
120
100
Housing
Price
(Indexed
at
100
in
2020)
Hyderabad
Noida
Gurugram
India
Delhi
Bengaluru
MMR
Pune
Ahmedabad
Kolkata
Chennai

37. 37
HOME LOAN INTEREST RATE MOVEMENT Source: SBI Data
Job Insecurity
(v)
FIVE IN 10 EMPLOYEES IN INDIA WORRY
ABOUT JOB SECURITY: SURVEY
A recent survey by ADP Research Institute
shows that 47% of employees in India are
feeling insecure about their jobs, which
is higher than the global average of 38%.
This sense of insecurity is even more
pronounced among younger workers, with
half of GenZ (18-24 years old) worried about
their job stability, compared to just 24% of
those over 55. The growing presence of
artificial intelligence (AI) and automation
technologies has only added to these
fears, as many are concerned about job
displacement across industries.
MORE THAN 1,30,000 IT EMPLOYEES HAVE
LOST THEIR JOBS SO FAR IN 2024 AS TECH
LAYOFFS
In 2024, over 130,000 employees across
397 companies were laid off, according to
Layoffs.fyi. Meanwhile, 13 out of 18 Indian
states and three union territories have seen
a decline in informal sector workers between
2015 and 2023, as reported by the National
Sample Survey Office (NSSO) in its Annual
Survey on Unincorporated Sector Enterprises.
11.00%
9.00%
7.00%
5.00%
7.30%
7.4%
8.3%
8.7%
9.1%
2020 2021 2022 2023 2024

38. 38
MIDDLE CLASS PAYING MORE TAXES
THAN CORPORATES
The Indian tax system has become
increasingly challenging for the Middle Class.
Despite making up just 2% of the population,
Middle Class taxpayers now contribute
more in income tax than corporations,
especially after the 2019 corporate tax cuts.
While corporate profits have soared, their
tax share has dropped, leaving the Middle
Class to bear a larger burden. On top of
rising income taxes, the Middle Class also
faces the full weight of GST with no relief,
unlike corporations that benefit from input
tax credits. This shift highlights the growing
pressure on individual taxpayers, who
are shouldering more of the nation’s tax
responsibilities.
“I’ve Got 99 Problems And
Paying Taxes Is One Of Them!”
(vi)
1200
1100
1000
900
800
700
600
500
400
WHY TAXES ARE
MORE PERSONAL
IN INDIA
Corporate Tax Income Tax
Data in
Lakh Crore 1,156,000
556,876
833,260 1,042,830
1,022,325
922,675
712,037
696,243
492,654
825,834
2021-2022
(Actual)
2019-2020
(Actual)
2022-2023
(Revised Estimate)
2022-2023
(Revised Estimate)
2024-2025
(Budget Estimate)
Years
Revenue Receipts (In ` Crore)

39. 39
Budget 2025 - A Game Changer.
[ 1 ] INCOME TAX RELIEF
The zero-tax threshold has been raised
to ` 12 lakh, exempting many taxpayers
from paying income tax. This change will
benefit around one crore people, enhancing
disposable income and boosting savings
and consumption.
[ 2 ] INCREASED STANDARD DEDUCTION
The standard deduction is now ` 75,000,
allowing salaried individuals earning up to
` 12.75 lakh to pay no tax. This reduces the
tax burden and frees up funds for expenses
and savings.
[ 3 ] BENEFICIARIES OFTHE NEWTAX SLABS
About 8.75 crore taxpayers will benefit from
the new tax slabs, leading to reduced tax
liabilities and more disposable income for
spending or saving.
[ 4 ] NEW TAX SLABS
The updated slabs are:
Up to ` 4 lakh No tax
` 4 lakh to ` 8 lakh 5%
` 8 lakh to ` 12 lakh 10%
` 12 lakh to ` 16 lakh 15%
` 16 lakh to ` 20 lakh 20%
` 20 lakh to ` 24 lakh 25%
Above ` 24 lakh 30%
These slabs reduce the tax burden, leaving
more income for the Middle Class to save
or spend.
[ 5 ] IMPACT ON CONSUMPTION
Increased disposable income will lead to
higher consumption in sectors like
automobiles, electronics, and housing,
stimulating economic growth.
[ 6 ] SAVINGS AND ECONOMIC GROWTH
Increased disposable income will lead
to higher consumption in sectors like
automobiles, electronics, and housing,
stimulating economic growth.
The 2025 Budget brings significant relief
to India's Middle Class, boosting disposable
income and consumption. These measures
align with India's long-term growth vision,
promising a more secure financial future and
a stronger economy for the Middle Class.

40. 40
Case Studies and
Anecdotal Insights
7
A TALE OF TWO MIDDLE CLASSES:
URBAN DREAMS & RURAL ASPIRATIONS

41. 41
Meet the Kumars from Bangalore—a
family that perfectly captures today's urban
Middle Class life. With a combined income
of ` 15 lakh, this IT power couple with two
kids represents the "Seekers" of modern
India. Their story? It's all about investing in
tomorrow.
HERE'S WHAT MAKES THEM TICK:
u Their biggest splurge? Education—think
private schools, coding classes, and a
small arsenal of digital learning tools.
u Tech isn't just a luxury; it's a lifestyle.
Multiple smartphones, a work laptop, and
a tablet for the kids' virtual classes are
must-haves.
u They're digital natives, juggling
subscriptions from Netflix to YouTube.
u Health is wealth: private insurance, gym
memberships, and regular check-ups are
non-negotiables.
u While they enjoy their weekend brunches
& annualvacations, they're savvysavers too,
dabbling in mutual funds & life insurance.
Now, let's visit the Singhs in their Uttar
Pradesh village. With a ` 6 lakh annual
income from their local shop and farming,
they're writing their own success story.
THEIR MIDDLE-CLASS JOURNEY LOOKS A
BIT DIFFERENT:
u Education still takes centre stage, with
kids attending a private school in the
nearest town.
u Technology? They're getting there—a
trusty smartphone handles everything
from WhatsApp to UPI payments.
u Entertainment means a second-hand TV
with a satellite connection—their window
to the wider world.
u Shopping habits are evolving: packaged
foods share shelf space with local
produce.
u When it comes to savings, they stick to
tried-and-tested gold and bank deposits.
The Urban Story: Where Tech Meets Tradition
The Rural Revolution: Traditional Roots, Modern Dreams

42. 42
Whether it's the tech-savvy Kumars or the
pragmatic Singhs, they're all chasing the
same dream—a better tomorrow. Urban
families might be racing ahead with digital
solutions, while rural households take
measured steps toward modernisation,
but both share that classic Middle Class
superpower: turning aspirations into
achievements.
What's holding them back? Urban
families wrestle with skyrocketing education
costs and healthcare bills, while rural families
face the classic infrastructure gap. But here's
the thing—they're all making it work, one
small victory at a time.
Understanding these families isn't just
interesting—it's crucial for anyone wanting
to tap into India's middle-class magic.
After all, they're not just demographic
statistics; they're the real architects of India's
consumption story.
THE BIG PICTURE: Here's What
Makes these Stories Fascinating

43. 43
Conclusion and
Way Forward
The data highlights the growing economic
power of India’s Middle Class, which,
despite higher incomes compared
to aspirers and destitutes, still faces
financial vulnerability. Many Middle Class
households report difficulty meeting basic
needs, driven by high living costs and
aspirations for upward mobility. While they
invest in key areas like education, housing,
and healthcare, the divide in access to
luxury goods, digital infrastructure, and
technology persists between income
groups. The rich enjoy more access
to consumer durables, advanced
technologies, and luxury items, while the
Middle Class continues to aspire for better
living standards.
WAY FORWARD
1. Bridging the Digital Divide: Expanding
internet access and digital literacy,
especially in rural areas, will enable the
Middle Class to leverage technology
for education, healthcare, and financial
growth.
2. Promoting Financial Inclusion:
Encouraging savings and investment
through accessible financial products
will enhance financial security for the
Middle Class, while broadening their
investment opportunities.
3. Supporting Rural Growth: Targeted
infrastructure development, education,
and healthcare improvements in rural
areas will help bridge the urban-rural
divide and stimulate economic growth.
4. Addressing Financial Vulnerability:
Affordable housing, healthcare, and
education, alongside social safety nets,
will ease the financial pressure on the
Middle Class, reducing reliance on debt.
5. Fostering Innovation and
Entrepreneurship: Supporting
education, innovation, and
entrepreneurship will help the
Middle Class drive technological
advancements, creating jobs and
fostering economic growth.
By addressing these areas, India can
unlock the full potential of its Middle
Class, ensuring that its growth leads to a
more prosperous and equitable society.
8

44. 44
REPORT PUT TOGETHER BY
Rajesh Makwana
Suhaib Ahmed

45. 45
CHENNAI
1st Floor, Prakash Building,
14, Deivasigamani Road,
Royapettah, Chennai - 600014
Ph: +91 44 28113426, +91 44 28113427
DELHI
The House of Mogae,
112, Udyog Vihar Phase IV,
Gurgaon - 122015
Ph: +91 0124 2345598
MUMBAI (Corporate)
1801 Lotus Corporate Park, Goregaon East, Mumbai - 400063
Ph: +91 22 49311000, +91 22 49312000
KOLKATA
10 Wood Street,
Kankaria Estates,
Elgin, Kolkata - 700016
Ph: +91 33 44066262, +91 33 22871232
BANGALORE
Unit. No. 401, 4th Floor,
No. 7 Sophia's Choice, St. Mark's Road
Bangalore - 560001
Ph: +91 7838595676
CHANDIGARH
3258, Sector 21-D,
Chandigarh - 160022