Union Finance Minister Nirmala Sitharaman has said that in the coming years, India’s middle class will play the biggest role in taking the country’s economy forward. He said that by the year 2036, 93% of the total consumer spending in India will come from the middle class and aspirational consumers. He said this during an economic conference organized in France.
Small cities will become new centers of development
Nirmala Sitharaman said that economic development in India will no longer be limited only to metros like Mumbai, Delhi, Bengaluru and Chennai. In the coming time, about 500 cities will emerge as new economic centres. He told that India’s middle class is growing rapidly in Tier-2 and Tier-3 cities. With this, the scope of economic activities and wealth in the country will move from big cities to small towns.
Middle class is growing rapidly
According to the Finance Minister, at present about 31% of India’s population falls in the middle class. Since 1995, this category has grown at an average rate of 6.3% every year. Citing OECD’s estimates, he said that between 2030 and 2035, India can leave China behind in terms of middle class population.
Got support from government schemes
Sitharaman said that the government started many schemes to bring low-income people into the middle class. Bank accounts of crores of people were opened through the Jan Dhan Yojana launched in 2014. According to World Bank and IMF data, about 248 million people have come out of multidimensional poverty and a large number of these are those who joined the formal banking system for the first time.
Emphasis on tax relief, digital facilities and employment
The Finance Minister said that the government helped in starting small businesses by providing easy loans without guarantee. Digital payment and banking facilities were extended to villages and small towns, which benefited small businessmen. Apart from this, schemes like increasing the income tax exemption limit, reducing GST on many items, health insurance and affordable medicines have left more money in the hands of people.
He also said that the government is continuously investing in the skill development of the youth. Training and employment opportunities are being increased in new areas like STEM education, AVGC (Audio-Visual, Graphics and Gaming).
Middle class will become the strength of the economy
Nirmala Sitharaman said that the objective of all the schemes of the government is to strengthen the middle class. He believes that when people’s income and spending power increases, it directly benefits business, investment and employment. This is the reason why India’s middle class is going to become the biggest growth engine of the country’s economic development journey in the coming years.
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