India’s Extreme Wealth Gap: 90% Struggle as Top 10% Thrive
A stark picture of India’s economic disparity has emerged from a recent study by venture capital firm Blume Ventures, featured in the Indus Valley Annual Report 2025.
The report reveals that nearly 100 crore Indians, representing a staggering 90% of the population, lack the discretionary income necessary for significant consumer spending.
The study underscores that India’s economic growth is heavily skewed towards the wealthiest 10% of its populace, a group comparable in size to Mexico’s entire population.
This elite segment is not expanding in numbers, but its wealth is rapidly accumulating, exacerbating the already widening wealth gap.
Consumption Downturn and Premiumisation:
Adding to the economic woes, the report highlights a severe consumption downturn, fueled by diminished purchasing power, dwindling savings, and rising debt.
This has compelled brands to shift their focus towards “premiumisation,” catering to the affluent rather than the mass market.
“There’s a significant divide between the very wealthy and the vast majority of the population,” stated a representative from Blume Ventures. “This trend is reshaping the entire consumer landscape.”
Real Estate and Experience Economy:
The real estate sector mirrors this trend, with affordable housing plummeting from 40% of the market five years ago to a mere 18% today.
Conversely, the “experience economy” is flourishing, as evidenced by the overwhelming success of high-profile concerts featuring international artists like Coldplay and Ed Sheeran.
Tax Rebate and Income Distribution
In an effort to stimulate middle-class spending, Finance Minister Nirmala Sitharaman announced a tax rebate in the Union Budget for individuals earning up to Rs 12 lakh, effectively exempting 92% of salaried individuals from income tax liability.
However, the report also sheds light on the alarming shift in national income distribution.
In 1990, the top 10% controlled 34% of India’s national income, a figure projected to rise to 57.7% by 2025. Conversely, the bottom 50%’s share has decreased from 22.2% to 15% over the same period.
Per Capita Consumption Lag: Despite impressive consumption growth, India’s per capita consumption remains significantly lower than that of China.
In 2023, India’s per capita consumption stood at $1,493, while China’s reached $1,597 back in 2010.
Emerging Consumers: Amidst these disparities, there are approximately 300 million “emerging” or “aspirant” consumers who are cautiously increasing their spending. However, their contribution to overall consumption remains limited.
The report concludes with a call for policies that address the growing wealth gap and promote inclusive economic growth, ensuring that the benefits of India’s economic progress are more evenly distributed.
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