India, with rapid increase in the purchasing power of middle class population, will experience a consumer boom supported by a sudden growth in demand for household products in the next few years, according to a study made by the Jersey-based investment managers Ashburton.
The number of people earning more than US$ 3,000 (about Rupees 1,35,000) a year is set to explode. The household income threshold of rupee one hundred thousand is widely viewed by economists as a trigger for the creation of a consumer society.
The number of households enjoying that level of income is expected to more than double from the last year’s 47 million to116 million, by 2010. Only 12 million Indian families had earned as much, in 1995.
This translates into more than 800 million middle class consumers, next only to China, where almost 80% of fast growing urban population would step into the consuming middle class by 2015 as against as low as 2% of population having such spending power in 1995. This growth will be primarily driven by demographics as the working population of both countries is expected to increase by 250m by 2020.
“The growth is staggering,” said Ashburton