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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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A perspective on our income and wealth

Posted by Muthu on October 6, 2016

I keep studying articles, books and reports on wealth, income and inequality. I’ve a keen interest in this subject.

We all know that as a nation we’ve a long way to go in coming out of poverty and raise the standard of living of our people. I came across different sets of data in this regard and wanted to share the same with you.

As per a recent Goldman Sachs report, the working population in India is classified as follows, based on average monthly income. I’ve taken 1 USD= Rs.66 for conversion.

Bottom 20%: Rs.2376 earnings per month

Next 27%    : Rs.4455

Next 23%    : Rs.11,875

Next 19%    : Rs.13,750

Next 6%      : Rs.29,617

Next 3%      : Rs.61,875

Next 2%      : Rs.62,915

Top 0.08%   : Rs.13,75,000 earnings per month

In Mint newspaper today, there is a small news item on a survey conducted by ministry of labour and employment. As per this, 68% of households in India earn less than Rs.10,000 a month. Only 2% of households have an income of more than Rs.50,000 a month. Just 0.2% of the households earn more than Rs.1 lakh a month.

National Council for Applied Economic Research (NCAER) has conducted India Human Development Survey. They have classified our population as follows based on household income. I’ve given below the income per month per household.

Poorest Quintile (Poorest 20%) : Rs.2750 earnings per month

2’nd Quintile                            : Rs.4636

3’rd Quintile                             : Rs.7401

4th Quintile                               : Rs.13,300

Richest Quintile (Richest 20%)   : Rs.13,301 and above.

I’ve shared with you in the past, global wealth report by Credit Suisse as well.

Only 5% of Indian population have wealth above $10,000 (Rs.6.6 lakhs). 95% of the population has almost negligible wealth.

Coming to the rich, as per latest new world wealth report, India has 95 billionaires (worth Rs.6600 crores+). There are around Rs.2.64 lakh millionaires (worth Rs.6.6 crores+, excluding primary residence). The breakup of millionaires city wise is as follows. I’ve given below only for few top cities.

Mumbai: 45,000 Millionaires

Delhi: 22,000

Kolkata: 8600

Hyderabad: 8200



Pune: 3900

Gurgaon: 3600

As far as middle class is concerned, it is around 2% of our population with an average monthly income of Rs.60,000. This includes 10 million government employees, around 1 million SME owners and 16 million working professionals. Out of this 16 million, around 4 million are employed in IT and BPO.

Hope this piece provides the perspective to put our income and wealth in the context of overall population.

6 Responses to “A perspective on our income and wealth”

  1. Simply put, Goldman Sachs report, NCEAR and World Wealth Report, all maintain that 2% of our population earns more than 60k per month. Among the professionals, IT and BPO have generated more millionaires than probably any other industry, mainly because of the fact that IT and BPO employs largest number of employees as an industry.

  2. Anantha said

    Very nice perspective! We think everybody is earning a ton of money when we are in the MNC or IT sector…that too in senior management. And it isnt true…

  3. Gov said

    The reason this looks so bad is because the parallel economy (black money) doesn’t get featured here. Many professionals including doctors operate with cash and their data is hardly reported. Look at the sales of D+ segment cars and correlate with millionaires and the difference will be appalling.

  4. sai said

    This is an eye-opener. Puts things nicely in perspective. A majority of the demographic who have the luck, education and time to read blogs like these must be falling into the top 2% economically. A timely reminder for each of us to count our blessings.

  5. Sameer said

    Muthu , great article , but it kept me thinking on what could be the level of accuracy of this data considering the parallel economy which runs around us. I stay in Pune (Maharashtra) a while ago i was planning to buy 1 acre of agriculture land, even 175-200 Kms away from Pune and not in well connected place, the rate of land quoted or best negotiated was @55 Lacs … i had to literally say “No” and tried option to get it on lease….

    Also interesting fact for the deal in agriculture is the black component is usually accepted in gold terms 🙂 The seller had @40 acers out of which he wanted to sell 10-15 ..so considering his sale goes though .. what would be his worth ?
    This is not one off examples as i have dealt with min 50-60 cases … as i was serious about my adventure 🙂

    I know people in villages do own land few acers , they have quite of uncertainty due to rains other natural factors .. but the current worth of land what they own can be much higher than what i draw as pay doing an IT job. I am not sure if agriculture income gets accounted as its tax free ..and do you think any of these farmers file returns ?

    Just an other perspective ….

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