India is the second largest Middle Class Population in the world today.

INDIAN MIDDLE CLASS CONSUMPTION IS 3 TRILLION TODAY.

HOW IS THAT GOING TO BENEFIT INDIAN ECONOMY.

India is the second largest Middle Class Population in the world today.

Indian Middle class population is more than the total population of USA today and it is going to be 380 million by 2022.

India is still in 3rd position in terms of Middle Class Consumption after overtaking Japan in 2016. India's middle class consumption is around $ 3 trillion and it will cross 4.7 trillion by 2022 to become the second largest middle class market in the world.

India's middle class consumption (USD 10.7 trillion) will be more than the total consumption of USA ($4.7 trillion), Japan($2.1 trillion), Germany ($1.5 trillion), UK ($1.2 trillion) and France ($1.1 trillion) by 2030

Source Brookings Report.

Middle class consumption means middle class spending for goods and services. Let's see, how is that going to benefit India. Just look at few sectors to see the impact of this middle class growth on the Indian economy. 

AUTOMOBILE

Middle class is buying more number of automobiles and automobile products that leads to jump in growth of companies in this industry. More jobs are created and add more to economic growth and GDP.

RETAIL

Spending is increased in retail sector and that again leads more organised retailing and warehousing and more number of malls. This ultimately leads to creation of more jobs, more construction, more demand for food, textile, luxury products. Push for more investment in the sector and more value addition to economy and GDP growth.

AVIATION

India has over 100 airports and people chose to travel by air and this leads to boom in this industry. Again this creates more jobs and leads to more investment.

TRAVEL & TOURISM

Middle class spending on travel and tourism goes up. Local economies are benefited. Taxi operators, hotels, restaurants and travel operators will get more business and it supports the growth of these sectors.

HOUSING

Middle class buy more houses. That too in mid to upper segments. Again, this boost real estate and construction segments which then leads to creation of more jobs and more investment.

EDUCATION

Middle class children go to better schools and the quality of education and education infrastructure is improved. More teachers and support staff required. More number of quality institutions are required which leads to employment creation and add to economic growth.

BANKING

Middle class can afford to buy more valuable consumer goods, services and capital goods. They take loans which leads to increased credit in the economy. Banking needs will go up and that creates more banking locations, jobs and more business for banks and supports economic growth.

DIGITAL

A digital revolution is launched in India very recently. Middle class prefer to do transactions online, using internet and this boost digital payment gateways and their business. Digital market is soon going to touch 1 trillion mark. More jobs and more investments in this sector. Buffet is investing in India for the first time now, in Paytm

TAX REVENUE

Demonetisation made Indian economy and formal economy. Tax revenue is increased 60% in 4 years. Middle and upper middle class spending using official channels spur the growth of tax revenue.

MARKETS

FIIs are net sellers in the Indian Share market for last 4 years but market is booming with the support of DIIs. We saw similar levels of sell off by FIIs in 2009 and 2010 and that lead to market crash. Today we see the reverse. Retail participation or Middle class investors are the reason for this share market boom. Middle class took the Indian market to a matured levels.