Affluent India
Affluent India Money may not buy happiness, but it can definitely buy security.
There has also been an increase in the upper-middle-class Indians who don’t shy away from spending and investing.
According to Goldman Sachs, the top 4% of the working-age population in India with a per capita income of ~8 Lacs/p.a. has grown at a CAGR of 12.6% between 2019-2023, while the rest of the working class only grew by 1.4% CAGR.
Along with buying premium products, this class believes in investing for the future. The effect can be seen across the investment class.
Equity
- Between 1st Jan 2020 and 1st Jan 2024, the Indian stock market has risen by 80%.
- In the same period, the participation of retail investors has increased substantially.
- The net flow of household savings into equity shares has been consistently high over FY17-23.
Gold
India’s love for gold is not unknown since our household owns 10% of the global physical gold.
The price of gold has increased from Rs. 39,900/10gms in Jan 2020 to Rs. 62,200/10gms. While the value of the total household gold in India has increased from $1.1Tn in 2019 to $1.8Tn in 2023.
Bank Deposits
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There has been a rapid growth in the bank term deposits of over Rs 15 Lacs. However, the growth of term deposits below Rs. 15 Lacs has been 2-3% CAGR only.
Property
The average property prices in India have risen by ~30% over FY19-23. This is much higher compared to ~13% growth over FY15-19.
These ‘affluent Indians’ are expected to grow from 4-6 Cr today to 10 Cr by 2027 and be the fuel of the Indian growth engine.
As more people rise towards the upper class and above, the need for security will also increase, which can lead to growth across the financial and investment sectors.
Source: Goldman Sachs report
Our previous tweets on the affluent consumption story of India...