Prime Minister Narendra Modi on Friday asserted that growing middle class will drive the nation towards ‘middle income economy’ status.

According to the World Bank, the world’s Middle Income Countries (MICs) are a diverse group by size, population and income level. They are defined as lower middle-income economies - those with a GNI (Gross National Income) per capita between $1,036 and $4,045; and upper middle-income economies - those with a GNI per capita between $4,046 and $12,535. Middle income countries are home to 75 per cent of the world’s population and 62 per cent of the world’s poor. At the same time, MICs represent about one third of global GDP and are major engines of global growth.

Quoting two repots – one by SBI Ecowrap and second by Capital Calculas, Modi listed various indicators in his post on a social media platform, LinkedIn. “Based on recent research by SBI and an analysis done on taxpayers’ data, it has emerged that the size and income of the Indian middle class have grown significantly in the last nine years,” he said.

“Per capita income is expected to increase from ₹2 lakh in FY23 to ₹14.9 lakh in FY47 (in dollar terms, the corresponding increase comes to $12,400 in FY47 from $2500 in FY23,” Modi mentioned in his post, quoting reports.

According to the SBI research report, 13.6 per cent of people moved up from the lower income bracket in AY23 in comparison with AY128.1% increase in the population with income between Rs 5 lakh and Rs 10 lakh. Report also showed 3.8 per cent increase in the population with income between Rs 10 lakh and Rs 20 lakh, 1.5 per cent increase in the population with income between Rs 20 lakh and Rs 50 lakh, 0.2 per cent increase in the population with income between Rs 50 lakh and Rs 1 crore and 0.02 per cent increase in the population with income above Rs 1 crore.

income tax

Further, the report said that Income Tax Return (ITR) filers are expected to increase to 48.2 crore in FY 2046-47 from 7 crores in FY 2020-23, increasing its share in the workforce with a taxable base to 85.3 per cent in FY 2046-47 from 22.4 per cent in FY 2022-23. The report added that by FY47, 25 per cent of ITR filers are projected to move out of the lowest-income category.

Of this 25, per cent, 17.5 per cent will have an income between Rs 5 lakh and Rs 10 lakh, 5 per cent will earn between Rs 10 lakh and Rs 20 lakh, 3 per cent will earn between Rs 20 lakh and Rs 50 lakh, 0.5 per cent will earn between Rs 50 lakh and Rs 1 crore and 0.075 per cent will earn more than Rs 1 crore.

Talking about Demat Accounts, Modi mentioned that it has more than doubled in four years. These accounts are indicator of wealth creation, he added. Similarly, the assets of under management of the Indian mutual fund industry—a popular means of investing in stock markets—have surged in the last decade. It grew more than four-fold from Rs 10 lakh crore in May 2014 to a massive Rs 46.37 lakh crore on 31 July this year, he concluded.

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