Winning Bizness Desk

Mumbai. As India aspires to become a developed nation by 2047, many experts have expressed concerns about maintaining the required growth rate to achieve this ambitious goal. While optimism prevails, a new report has questioned the very definition of development in India.

According to Bloom Ventures’ ‘Indus Valley Annual Report 2025,’ India’s long-standing problem remains unchanged: the rich are getting richer, while the poor struggle to survive. The report reveals that 90% of India’s population—around 1 billion people—have no extra income for discretionary spending. Their earnings are just enough to meet basic monthly expenses.

India’s Economy Driven by Top 10% of Population

• The top 10% of Indians, around 130-140 million people, are driving the country's consumption and economic growth.
• This group is equivalent to the entire population of Mexico.
• Instead of expanding, India’s consumer market is becoming “deeper” rather than “wider”—meaning that while the rich are getting wealthier, the overall number of wealthy individuals is not increasing significantly.
• Around 300 million people are classified as “emerging” or “aspirational” consumers, but they remain hesitant to spend freely.

Shift Towards Premium Products and Experiences

Indian brands are increasingly focusing on premium products rather than affordable ones.

The affordable real estate sector has declined from 40% five years ago to just 18% now.

The success of Coldplay and Ed Sheeran’s sold-out concerts in India highlights the rise of an “experience economy”, where high-income consumers prioritize premium experiences.

Middle-Class Tax Relief in Budget 2025

The Union Budget presented by Finance Minister Nirmala Sitharaman this month introduced an income tax exemption for earnings up to ₹12 lakh.

This move is expected to benefit 92% of salaried individuals, boosting their spending capacity.

Growing Wealth Gap: Rich Hold a Larger Share of National Income

According to Deccan Herald, in 1990, the top 10% of Indians controlled 34% of the country’s total income.

By 2025, this figure has surged to 57.7%, while the share of the bottom 50% has declined from 22.2% to just 15%.

India’s Consumption Lags 13 Years Behind China

Despite India’s strong consumption growth rate, it still lags 13 years behind China.

In 2023, India’s per capita consumption stood at $1,493, whereas China reached $1,597 back in 2010.

This report raises critical concerns about income inequality and concentrated economic growth, highlighting the challenges India must address to achieve its 2047 development goals.