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India's average income for the middle class has increased a lot over the years, going from about Rs 4.4 lakh to Rs 13 lakh between 2012-13 and 2021-22. This happened because more people moved up from lower to higher income levels, and more people started reporting their income for taxes.
A report from SBI Research says that around 13.6 per cent of people moved up to higher income levels in 2023 compared to 2012.
The report also predicts that India's average income per person will go up from Rs 2 lakh in 2023 to Rs 14.9 lakh in 2047. In dollars, it will increase from $2500 to $12400.
In 2011-12, about 16 million people filed their income tax returns (ITR), with most of them having incomes up to Rs 5 lakh. But in 2023, 68.5 million people filed ITRs, and most of them still had incomes up to Rs 5 lakh.
The report also says that by 2047, 25 per cent of ITR filers might move to higher-income groups. Around 17.5 per cent could have incomes between Rs 5 lakh to Rs 10 lakh, 5 per cent might have incomes from Rs 10 lakh to Rs 20 lakh, and 3 per cent could have incomes from Rs 20 lakh to Rs 50 lakh.
The report shows that many more people are moving to higher-income groups. For example, 8.1 per cent of people now have incomes between Rs 5 lakh to Rs 10 lakh, compared to before. Similarly, 3.8 per cent have incomes from Rs 10 lakh to Rs 20 lakh and 1.5 per cent have incomes from Rs 20 lakh to Rs 50 lakh.
A small percentage of people, 0.2 per cent, now have incomes from Rs 50 lakh to Rs 1 crore, and an even smaller percentage, around 0.02 per cent, have incomes above Rs 1 crore.
The report predicts that about 0.5 per cent of people might have incomes from Rs 50 lakh to Rs 1 crore, and 0.075 per cent might have incomes above Rs 1 crore by 2047.
The population of India is expected to grow to 1610 million by 2047 from 1400 million in 2023. The number of people working is also going to grow, from 530 million to 725 million, which means more people will be working compared to the total population.