The 9 years of the Modi government (2014-present) have ushered into a new era of development, especially for the Indian middle class.
As per a research report [pdf] published by the State Bank of India (SBI) on Tuesday (August 15), the analysis of the Income Tax returns filed in the Financial Year 2022-2023 revealed the ascent of the Indian middle class.
This cohort has the potential to turn India into a ‘middle-income economy’ by the Financial Year 2046-2047, coinciding with the centennial celebrations of Indian Independence. SBI estimated that there will be 48.2 crore ITR filers in FY 2047 as compared to 7 crores in FY 2022-2023.
By then, 85.3% of ITR filers will also be eligible to pay taxes. About 25% of them are also expected to leave the lower-income strata by the Financial year 2046-2047. The per capita income is also expected to rise from ₹2 lakhs in this Financial year to ₹14.9 lakhs by FY 2047.
This can largely be attributed to the Modi government’s efforts in formalising 7 crore Micro, Small and Medium Enterprises (MSMEs) and empowering the middle class.
Moreover, the weighted mean income of ₹4.4 lakhs in the Assessment Year 2013-2014 has increased to ₹13 lakhs in Assessment Year 2023-2024 and is projected to increase to ₹49.7 lakhs (~ 50 lakhs) in Assessment Year 2046-2047.
The stark increase in weighted mean income, as evident from the ITR filed between Assessment Years 2011-2012 and 2022-2023, explains the transition of filers from the lower-income group to the upper-income group.
“It is projected that weighted mean income is expected to increase from Rs 13 lakhs currently to Rs 49.7 lakhs in 2047, particularly due to increase in the number of tax-filers, as also due to shifting of distribution of tax-filers from lower income group to upper-income group,” the report stated.
The finding is further supplemented by the ‘material decline in zero tax liability’, as evident from the research report published by the State Bank of India (SBI). This indicates an increase in income of the ITR filers, with zero tax liability share down from 84.1% (AY 12) to 64% (AY 23).
It should be noted that 84% of the 1.6 crore ITR filers in Assessment Year 2011-2012 belonged to the income group of upto ₹5 lakhs. In AY 2023, the number is down to 64% (in a pool of 6.45 crores ITR filers).
“Inter-alia, 13.6% population has left the lower income strata and migrated upwards in AY23 in comparison with AY12…8.1% population has increased in the income group of Rs 5 lakh- Rs10 lakh,” the SBI research report said.
“3.8% population has increased in the income group of ₹10 lakh – ₹20 lakh, 1.5% population has increased in the income group of ₹20 lakh – ₹50 lakh, 0.2% population has increased in the income group of ₹50 lakh – ₹1 crore, while close to 0.02% population has increased in the income group of above ₹1 crore,” it further added.
The upward mobility of all income groups, especially the middle class is evident from Income Tax returns filed between Assessment Year 2011-2012 and Assessment Year 2022-2023. According to the State Bank of India, about 25% of ITR filers are predicted to leave the lowest income strata by the Financial Year 2046-2047.
The research report also highlighted an increase in the workforce from 37.9% of the population in FY23 to 45% of the population in FY 47, thereby adding 19.5 crore people to the workforce.
It must be mentioned that the Modi government has undertaken several initiatives such as ‘Skill India’, ‘Startup India’ and ‘Make in India‘ to empower India’s youth and prepare them to join the competitive marketplace. All of this is done with the sole objective of making the nation ‘Atamanirbhar’ in this Amrit Kaal.
PM Modi on fighting poverty, empowering youth
During his Independence Day address, Prime Minister Narendra Modi informed the nation that 10 lakh people have benefitted from the Pradhan Mantri Mudra Yojana.
“About eight crore people have started new businesses, and it’s not just eight crore people who started their businesses; each entrepreneur has provided employment to one or two individuals,” he stated.
“The capability to provide employment to 8-10 crore new individuals has been achieved through the Mudra Yojana availed by eight crore citizens,” the Prime Minister highlighted. He added that 13.5 crore people were able to break the chains of poverty by utilising government schemes and enter the middle class.
