A recent report by Blume Ventures has revealed a staggering economic disparity in India: approximately 100 crore Indians lack discretionary spending power, meaning they have little to no financial capacity beyond fulfilling their basic necessities. This leaves only 13 to 14 crore people—about 10% of the population—as the primary drivers of India’s consumption economy. Additionally, 30 crore people fall into an emerging middle segment, exhibiting some level of discretionary spending but remaining highly price-sensitive.
This report provides a crucial lens through which we can examine India’s economic structure, consumer market, and widening inequality.
The Consumption Concentration Problem
At first glance, India’s 1.4 billion strong population suggests a vast consumer market. However, the reality is far more limited:
· Top 10% (13-14 Crore) dominate consumption.
· Next 20% (30 Crore) are emerging as consumers, but cautiously.
· Bottom 70% (100 Crore) have minimal impact on discretionary spending.
This means that businesses cannot target “all of India”—only a small fraction of the population actually drives economic activity. This concentration affects everything from marketing strategies to product pricing, making it harder for brands to sustain mass-market growth.
The Struggle of 100 Crore People
For the bottom 70%, financial constraints dominate daily life. Rising costs of essentials mean they rarely have money left for non-essentials. Some key challenges include:
- Stagnant Wages – Wage growth has been slow, limiting financial mobility.
- High Cost of Living – Inflation in essentials has outpaced income growth.
- Low Savings & Disposable Income – After covering basics, little remains for discretionary spending.
- Limited Access to Credit – Without financial backing, wealth accumulation becomes nearly impossible.
For this group, affordability dictates spending. Brands targeting them must prioritize price-conscious products over premium offerings.
The Emerging Middle Class: A Growth Opportunity
While the top 10% control consumption, the emerging middle class (30 crore people) is a critical group that could shape the future. They:
- Are digital-first consumers, driving the success of fintech, edtech, and subscription-based services.
- Have increasing aspirations but remain highly price-sensitive.
- Require affordable financing options to sustain higher spending habits.
This segment is key for businesses looking to expand, but they require carefully balanced pricing strategies.
The Trend of Premiumisation
Given that India’s wealthiest are driving economic activity, many businesses are shifting towards premiumisation—offering high-end, expensive products.
Examples of Premiumisation in Action:
- Luxury Real Estate Boom – While affordable housing stagnates, luxury homes are in high demand.
- High-End Smartphone Sales Rise – Despite India being a price-sensitive market, premium smartphone sales (₹50,000+) have surged.
- Premium FMCG Growth – Brands are launching expensive, organic, and gourmet versions of everyday essentials.
- Luxury Car & SUV Sales at Record Highs – Despite an economic slowdown, brands like Mercedes, BMW, and Audi reported record sales in India in 2023.
This shift suggests that businesses are increasingly targeting the wealthy, rather than focusing on affordability for the larger population.
What Needs to Be Done?
For a more inclusive economy, steps must be taken to empower the bottom 70% and strengthen the emerging middle class.
1. Strengthen Wage Growth & Job Creation
Increase wages, especially in informal and lower-income sectors.
Encourage investments in manufacturing & services to create higher-paying jobs.
2. Improve Access to Credit & Financial Inclusion
Expand microfinance & SME funding to empower small businesses.
Strengthen financial literacy and provide accessible loans for lower-income groups.
3. Expand Affordable Goods & Services
Companies must balance premiumisation with affordability.
Focus on budget-friendly housing, education, and healthcare.
4. Policy Interventions for Equitable Growth
Ensure that economic policies benefit not just the top earners but also the middle and lower-income segments.
Implement progressive taxation & wealth redistribution strategies.
Conclusion
The Blume Ventures report starkly highlights India’s growing wealth divide. With 100 crore Indians struggling to afford non-essential goods, only 10% fueling consumption, and 30 crores in an emerging but fragile middle class, the country’s economic model is heavily skewed toward the wealthy.
India’s true potential lies in expanding its consumer base beyond just the top 10%. By investing in wage growth, financial access, and inclusive policies, the country can broaden economic participation and create a truly powerful consumer-driven economy. The path ahead requires a balanced approach—one that caters to both the affluent and the aspiring while uplifting the struggling majority.
