India's Income Pyramid
Every business, be it small or big, domestic or foreign, retail or corporate, bank or hedge fund - are all raving about the emergence of India's rising middle class and are very interested in getting a pie of the new well-to-do Indian market. Lets get down to the numbers to see what India's income pyramid looks like.
Based on the data from NSS (National Sample Survey) and NCAER (National Center for Advanced Economic Research), there are about 70-90 million (7-9 crore) households with an income range of Rs.75,000 to several crores.
Upto Rs.3 Lacs income - Mass Market - 4.8 crore households
Rs.3-15 Lacs income - Emerging Affluent - 1.6 crore households
Rs.15 Lacs - Rs.1.25 crore - Affluent - 2.4 Lac households
Rs.1.25 - Rs.25 crores - HNIs - 1 Lac households
Rs.25 - Rs.300 crores - Ultra-HNIs - 7500 households
>= Rs.300 crores - RICH - 1500 households
>= Rs.600 crores - ULTRA RICH - 700 households
Using an average of 4-5 people per household, that covers about 400 million, or roughly 1/3rd of Indian population. The mean expenditure of urban households is at Rs.1.03 lac p.a and that of rural households is Rs.62k p.a (thats a $100 bn annually). Now we know why FDI in retail sector was a mad rush saga. This pyramid also helps to understand where exactly the Dominos, Ducatis and the Bentleys go!
Wealth Polarization
Per a recent survey, the wealth of the super-rich 7850 UHNIs is $985 billion (about half of India's GDP) and there are 61 $-billionaires (wealth > Rs.6000 crores) in India. While the emerging affluent group is growing at a rate of 9% p.a, the HNI group grew @22% over last year. If your annual income is over Rs.3 Lacs, you form part of the top 1% income earners in the country and if over Rs.15 Lacs you are in the top 0.1% - well, the HNI segment (>Rs.1.25 cr) forms only 0.05% of the population.
Is this income polarity unique to India? Nope, in fact every market which adopts capitalism would sooner or later find itself in such concentration of income at the top. In the US, which is a fore father of capitalism, the top 1% takes home 22.5% of the nation's total income, while the top 10% takes home 50% of the nation's total income. Economists have warned that income concentration is now as high as the periods prior to the Great depression in 1930s. India's income pyramid is not very different from that of the US - something to ponder about..
Based on the data from NSS (National Sample Survey) and NCAER (National Center for Advanced Economic Research), there are about 70-90 million (7-9 crore) households with an income range of Rs.75,000 to several crores.
Upto Rs.3 Lacs income - Mass Market - 4.8 crore households
Rs.3-15 Lacs income - Emerging Affluent - 1.6 crore households
Rs.15 Lacs - Rs.1.25 crore - Affluent - 2.4 Lac households
Rs.1.25 - Rs.25 crores - HNIs - 1 Lac households
Rs.25 - Rs.300 crores - Ultra-HNIs - 7500 households
>= Rs.300 crores - RICH - 1500 households
>= Rs.600 crores - ULTRA RICH - 700 households
Using an average of 4-5 people per household, that covers about 400 million, or roughly 1/3rd of Indian population. The mean expenditure of urban households is at Rs.1.03 lac p.a and that of rural households is Rs.62k p.a (thats a $100 bn annually). Now we know why FDI in retail sector was a mad rush saga. This pyramid also helps to understand where exactly the Dominos, Ducatis and the Bentleys go!
Wealth Polarization
Per a recent survey, the wealth of the super-rich 7850 UHNIs is $985 billion (about half of India's GDP) and there are 61 $-billionaires (wealth > Rs.6000 crores) in India. While the emerging affluent group is growing at a rate of 9% p.a, the HNI group grew @22% over last year. If your annual income is over Rs.3 Lacs, you form part of the top 1% income earners in the country and if over Rs.15 Lacs you are in the top 0.1% - well, the HNI segment (>Rs.1.25 cr) forms only 0.05% of the population.
Is this income polarity unique to India? Nope, in fact every market which adopts capitalism would sooner or later find itself in such concentration of income at the top. In the US, which is a fore father of capitalism, the top 1% takes home 22.5% of the nation's total income, while the top 10% takes home 50% of the nation's total income. Economists have warned that income concentration is now as high as the periods prior to the Great depression in 1930s. India's income pyramid is not very different from that of the US - something to ponder about..
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