India's Affluent Class Projected To Reach 100 Million by 2027, Goldman Sachs Reports

A recent report by Goldman Sachs predicts that India's affluent class is set to expand to a staggering 100 million individuals by 2027. The report, released on Friday, emphasises that domestic companies specialising in premium goods are expected to outperform their broad-based counterparts in this flourishing market.

Goldman Sachs attributes this significant rise in the affluent population to a combination of factors, including robust economic growth, a stable monetary policy, and substantial credit expansion over the past decade. 

The purchasing power of high-earning Indians has notably surged, leading to a substantial increase in the number of individuals earning above USD 10,000 (Rs 8.28 lakh) annually, soaring from 24 million in 2015 to an impressive 60 million at present.

India, presently the world's fifth-largest economy, is poised to ascend to the third position by 2027, according to projections by the International Monetary Fund.

The report underscores the rising spending power within the Indian middle class, particularly benefiting firms offering premium brands in sectors such as leisure, jewellery, out-of-home goods, and healthcare. Bloomberg highlights the Goldman report, which indicates a notable increase in the purchasing power of the Indian middle class.

Over the past three years, the country has witnessed a substantial surge in the value of financial and physical assets, contributing to a considerable increase in overall wealth. Traditional assets like gold and property are being increasingly seen as important stores of wealth. 

Additionally, there has been a significant shift in households channelling their investments into equities through direct stock purchases or mutual funds over the last five years, according to the report.

However, the report also highlights the persistent disparity in spending power between the top earners and the middle-income groups in India. Despite the issuance of over 96 crore debit cards and 9.30 crore postpaid cell phone connections in the country, only 3 crore Indians can afford a vehicle, underscoring the existing economic divide.

As India gears up to become the world's third-largest economy, the challenges and opportunities posed by this expanding affluent class will undoubtedly reshape the dynamics of the country's consumer market in the years to come.