New Delhi: India’s economic growth over the past decade has been broad based, with the gap between rich and poor steadily narrowing across both rural and urban areas, Union Finance Minister Nirmala Sitharaman told Parliament on Monday. Citing consumption and asset ownership trends, she said lower income households are acquiring wealth at a faster pace than higher income groups, reflecting a more inclusive growth pattern.
Referring to India as the fastest growing major economy, the minister said the country is expanding at a rate of 8.2 per cent, significantly ahead of the global average of 3.2 per cent. She noted that actual household consumption data shows the bottom 40 per cent of the population is gaining assets more rapidly than the top 20 per cent, leading to a sharp decline in inequality in asset ownership.
This shift is particularly visible in rural India. Asset poverty among rural households, defined as owning none of the key assets, has dropped sharply from around 30 per cent to about 5 per cent. According to the minister, this reflects a strong rise in purchasing power among the rural poor and a meaningful improvement in living standards.
She highlighted a sharp increase in ownership of everyday and aspirational goods. Mobile phone ownership has become nearly universal, rising from 66.5 per cent to 94.3 per cent. Refrigerator ownership has grown eightfold, moving from 2.9 per cent to 22.5 per cent. Over the same period, motor vehicle ownership increased sevenfold, climbing from 6.2 per cent to 47.1 per cent.
Urban India has also witnessed a marked narrowing of consumption gaps. In some cases, the trend has reversed, with the bottom 40 per cent now owning more televisions at 77.4 per cent compared to 72.1 per cent among the top 20 per cent. The ownership gap for refrigerators in urban areas has reduced dramatically from over 46 percentage points in 2011 to just over 12 percentage points in 2023.
The finance minister said these trends have strengthened global confidence in the Indian economy, resulting in improved growth outlooks and credit rating upgrades from major international agencies. Despite challenges such as the pandemic, high fiscal and current account deficits, and elevated food inflation in earlier years, India has maintained its position as the world’s fastest growing major economy for several consecutive years, underscoring the resilience of its economic fundamentals.
