Middle-Class Incomes Triple in 10 Years; Millions Rise to Higher Income Levels, SBI Research Finds

In an exciting development for India’s middle-class, a recent SBI Research report reveals a remarkable threefold increase in the country’s average income. Over the period of FY2012-13 to FY2021-22, the average income surged from Rs 4.4 lakh to a remarkable Rs 13 lakh. This impressive growth owes itself to a shift from lower-income to higher-income groups and a surge in the number of tax filers disclosing their income.

The report further unveils a significant shift in the socio-economic landscape, with 13.6% of the population graduating from the lower-income bracket to higher ones between Assessment Year (AY) 2012 and AY 2023.Middle-Class Incomes Triple in 10 Years; Millions Rise to Higher Income Levels, SBI Research Finds

Rising Prosperity and Ascent of New Middle Class

As per the SBI Research, in AY 2011-12 (FY11), a total of 16 million individuals filed their Income Tax Returns (ITRs), with a whopping 84% of them falling under the income category of up to Rs 5 lakh. However, fast forward to AY 2023, and a staggering 68.5 million people submitted their ITRs. Encouragingly, the concentration of individuals in the income group of up to Rs 5 lakh reduced to 64%.

Future Outlook: The Path Ahead

The SBI Research report paints an optimistic picture for India’s economic future. The per-capita income is projected to rise from Rs 2 lakh in FY23 to an impressive Rs 14.9 lakh in FY47. In terms of US dollars, this growth translates to an increase from $2500 in FY23 to $12400 in FY47.

Changing Landscape of Income Groups

The report forecasts that by FY47, a quarter of ITR filers will transition away from the lowest income bracket. Within this shift, about 17.5% of filers are anticipated to move into the income group of Rs 5 lakh to Rs 10 lakh. Furthermore, 5% are expected to ascend to the income range of Rs 10 lakh to Rs 20 lakh, while 3% are predicted to join the bracket of Rs 20 lakh to Rs 50 lakh.

A Glimpse into the Future

According to the SBI Research, there is a promising pattern of economic growth that lies ahead. Within the projected timeframe, it’s predicted that 8.1% of the population will see an increase in income to the range of Rs 5 lakh to Rs 10 lakh. Additionally, 3.8% are set to experience growth in the Rs 10 lakh to Rs 20 lakh bracket, and 1.5% will elevate to the range of Rs 20 lakh to Rs 50 lakh.

Steps Towards Greater Prosperity

The report points out that even higher income groups will experience an upswing. Around 0.2% of the population is expected to move into the income category of Rs 50 lakh to Rs 1 crore, and an even smaller segment of about 0.02% will venture into the above Rs 1 crore range by FY47.

Population Growth and Workforce Expansion

In sync with this economic transformation, India’s population is set to burgeon to 1610 million by FY47 from the current 1400 million in FY23. This is accompanied by a remarkable increase in the workforce, projected to rise to 725 million by FY47, up from 530 million in FY23. This upward trajectory is predicted to elevate the workforce’s share in the population from 37.9% in FY23 to 45% in FY47.

Bright Days Ahead

With these exciting trends and numbers, India is moving towards a future of increased prosperity and upward mobility. As incomes rise and the middle class expands, the nation’s economic landscape is set to undergo transformative changes, promising a better quality of life for its citizens.

Frequently Asked Questions (FAQs) – India’s Middle-Class Income Growth and Economic Outlook

Q1: What is the key finding of the SBI Research report regarding middle-class income in India?

A1: The SBI Research report reveals that India’s weighted mean income has tripled from Rs 4.4 lakh to Rs 13 lakh between FY2012-13 and FY2021-22, signaling a substantial increase in middle-class income.

Q2: How has the shift in income groups contributed to this income growth?

A2: The report highlights that 13.6% of the population moved out of the lower-income strata and shifted to higher-income groups during Assessment Year (AY) 2012-2023.

Q3: What was the income distribution trend among tax filers in previous years?

A3: In AY 2011-12 (FY11), 84% of tax filers fell into the income group of up to Rs 5 lakh. However, by AY 2023, this percentage reduced to 64%.

Q4: What does the report predict about India’s per-capita income in the future?

A4: The report forecasts that India’s per-capita income is expected to rise from Rs 2 lakh in FY23 to Rs 14.9 lakh in FY47, showing a significant increase.

Q5: How does the report project the transition of income groups in the future?

A5: According to the report, by FY47, 25% of Income Tax Return (ITR) filers are expected to move away from the lowest income bracket. Around 17.5% are predicted to shift to the income group of Rs 5 lakh to Rs 10 lakh, 5% to Rs 10 lakh to Rs 20 lakh, and 3% to Rs 20 lakh to Rs 50 lakh.

Q6: What are the expectations for higher-income groups in the future?

A6: The report suggests that a small percentage of the population is anticipated to move into higher-income groups: about 0.2% into the Rs 50 lakh to Rs 1 crore range and approximately 0.02% into the above Rs 1 crore range by FY47.

Q7: How does population growth and workforce expansion factor into these trends?

A7: The report predicts that India’s population will increase to 1610 million by FY47 from 1400 million in FY23. Correspondingly, the workforce is projected to rise to 725 million by FY47, accounting for 45% of the population.

Q8: What does the report imply for India’s economic future?

A8: The report presents an optimistic outlook, showcasing a promising future of increased prosperity, economic growth, and improved quality of life for the people of India.

Q9: What is the expected increase in India’s per-capita income in dollar terms?

A9: In dollar terms, India’s per-capita income is projected to grow from $2500 in FY23 to $12400 in FY47.

Q10: How does the report describe the changing landscape of income groups?

A10: The report predicts shifts in income groups, with segments of the population expected to see growth in various income brackets, including Rs 5 lakh to Rs 10 lakh, Rs 10 lakh to Rs 20 lakh, and Rs 20 lakh to Rs 50 lakh, among others.

2 thoughts on “Middle-Class Incomes Triple in 10 Years; Millions Rise to Higher Income Levels, SBI Research Finds”

Leave a Reply

Your email address will not be published. Required fields are marked *