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

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Our India is not big

Posted by Muthu on June 17, 2018

I was reading this piece recently.

India has been classified into three as India 1, India 2 and India 3 based on per capita income.

There are 280 million households in India with a population of 1340 million, averaging 4.8 persons per household.

We all belong to India 1 for which details are given below.

India 1 has 23 million households containing 110 million people. The working members of these households are 31 million. So an average a household has 1.3 working people.

The annual per capita income of India 1 is US$8,800 (Rs.0.6 million).

Only 8% of India, 110 million people are upwardly mobile.

10 million iPhone users, 32 million car owners, 37 million credit card holders, 50 million post paid mobile users, 59 million tax payers, 65 million domestic flyers, 24 million international flyers and 20 million ecommerce shoppers; all belong to this top 8% of population categorised as India 1.

India 2 with 104 million people spread among 22 million households has per capita income of US$3000 (Rs.0.2 million). This is another 8% of India which is aspiring to move up to India 1.

India 3 with 1126 million people spread among 235 million households has per capita income of US$1200 (Rs.80 thousand). This 84% is poor of India struggling to survive.

India moving from low income to middle income over next 2 decades would increase upwardly mobile and aspirers.

Only 8% of India can even dream of achieving financial independence. Like many countries, only 1% of population may actually achieve it. We need to keep this in mind.

Also giving needs to be part of everyone’s financial planning. Focus on giving should be on par with consuming and saving. We definitely owe that to the less fortunate.

4 Responses to “Our India is not big”

  1. Agile said

    Interesting views . Thanks for sharing this insightful info. Often get carried away that India has billion+ population , to justify any crazy valuations on companies while the fact is only India 1 and India 2 the top 20% only can afford to move the needle .

  2. VSS said

    The income quoted per capita basis appears to be on higher side for the India 1 segment.(0.6 million / year ).Is it not per family ?
    Also we have a large population of senior citizens.Is there a separate data compiled for them or are they a part of above data pool ?

  3. SP9 said

    https://www.dailyo.in/variety/niti-aayog-says-india-facing-worst-water-crisis-history-no-growth-gdp/story/1/24902.html

    Even with the above, Will India growth story continue ?

  4. CR7 said

    Interesting data points and there are many such reports already present. Also, India is a nation of lot of corrupt individuals. It would be interesting to find out if such people having noncumulative corrupt income are part of this study.

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