• India is poised to become the third-largest consumer market behind only the US and China; and consumer spending in India is expected to grow from USD 1.5 trillion at present to nearly USD 6 trillion by 2030, a World Economic Forum.
The report produced in collaboration with Bain & Company builds on consumer surveys conducted across 5,100 households in 30 cities and towns in India, and draws from more than 40 interviews with private and public-sector leaders.
Key observations made by the WEF
• According to World Economic Forum (WEF), with an annual GDP growth rate of 7.5 per cent.
• India is currently the world’s sixth-largest economy.
• By 2030, domestic private consumption, which accounts for 60 per cent of the country’s GDP, is expected to develop into a USD 6-trillion growth opportunity.
• The report titled ‘Future of Consumption in Fast-Growth Consumer Market – India’ noted that growth of the middle class will lift nearly 25 million households out of poverty.
• As per the report, growth in income will transform India from a “bottom of the pyramid economy” to a middle class-led one.
• Future consumption growth will mainly come from rich and densely populated cities and the thousands of developed rural towns.
• India’s top 40 cities will form a USD 1.5 trillion opportunity by 2030, many thousands of small urban towns will also drive an equally large spend in aggregate.
• In parallel, there will be an opportunity to unlock nearly USD 1.2 trillion of spend in developed rural areas by improving infrastructure and providing access to organised and online retail,” WEF noted.
• To unlock the potential of these opportunities and to ensure equitable growth.
• The report identified three critical societal challenges that need to be addressed skills development and employment for the future workforce, socio-economic inclusion of rural India and healthy and sustainable future.
Mains Paper 3: Economy
Prelims level: World Economic Forum
Mains level: Indian economic development