The Indian middle class, target consumers for many companies, is expected to swell up to 267 million people in the next five years, up 67% from the current levels, thus providing a great market opportunity for firms, according to NCAER.
A report by National Council for Applied Economic Research's (NCAER) Centre for Macro Consumer Research said by 2015-16, India will be a country of 53.3 million middle class households, translating into 267 million people falling in the category.
As per the study, which uses 'household income' as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels) falls in the middle class category.
(As per 2000-01 prices, middle class classification was based on annual income of Rs 2-10 lakh.)
Currently India has 31.4 million middle class households (160 million individuals).
"Factors such as the country's GDP growth, which is projected to be around nine%, going ahead and high growth rate of urbanisation will result in the increase of middle class in the country," NCAER's Centre for Macro Consumer Research (CMCR) Director Rajesh Shukla told PTI.
Further ahead, by 2025-26 the number of middle class households in India is likely to more than double from the 2015-16 levels to 113.8 million households or 547 million individuals.
"There is a huge market being created for the white goods and automobile makers," Shukla said.
Besides, the growth in the number of middle class households will translate into huge demand for the products such as cars, televisions, computers, air-conditioners, microwave ovens and credit cards, he added.
Interestingly, as per NCAER findings, the middle class that represents only 13.1% of India's population currently owns 49% of total number of cars in India, 21% of TVs, 53.2% of computers, 52.9% of ACs, 37.8% of microwaves and 45.7% of credit cards.
The report said a typical Indian middle class household spends about 50% of the total income on daily expenses with the remaining goes into savings.
"Which means a middle class family has strong purchasing power to spend on durables and other items," Shukla said.
As per the findings, the percentage of the middle class in the country's total population, will increase to 20.3% by 2015-16 and 37.2% by 2025-26.