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Consumer boom
India’s consumer market set to become world’s third-largest by 2027 due to rising middle- to high-income households.
India’s consumer market will climb two spots to become the world’s third-largest by 2027, thanks to a fast-rising number of middle- to high-income households, according to BMI, a Fitch Solutions company. India’s household spending per capita will outpace that of other developing Asian economies, the research firm notes. According to its projections, over a quarter of Indian households by 2027 will touch $10,000 in annual disposable income. Income tax data for 2022-23 indicates only around 7 million homes, assuming one tax-filer per home, can officially be slotted in brackets earning ₹10 lakh or more annually. Even if the tax net doesn’t capture prosperity fully, it will take quite a leap for BMI’s projections to be met. The report says most households with high disposable incomes will reside in economic centres such as Mumbai, Delhi and Bengaluru, which would not be a surprise if it’s a sharply K-shaped recovery from the pandemic that goes on to deliver a manifold increase in middle-class purchasing power. If it happens, it will result in tax buoyancy, but we must focus on those left stuck in income brackets below the modest level at which personal tax kicks in.
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First Published:7 Sep 2023, 11:46 PM IST
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