India inhabits three different economic realities within its borders, India 1, the affluent and digitally empowered elite; India 2, the aspirational middle class caught in stagnation; and India 3, the invisible majority struggling for survival. https://thewire.in/economy/three-indias-economic-divide-mexico-indonesia-sub-saharan-africa
The Indus Valley Annual Report 2025, published by Blume Ventures, paints a striking picture of India’s economic landscape, not something we are completely unaware of, but confirming our fears of a deeper divide.
India 1: The wealthy elite driving growth
India1 represents the top 10% of earners, who enjoy access to global markets, financial investments, and premium consumption. They are the biggest beneficiaries of India’s digital public infrastructure, venture capital boom, and policy incentives favouring high-income sectors.
India 2: The aspirational yet struggling middle class
If India 1 is equivalent to Mexico in the world, India 2 is Indonesia, says the report.
The emerging aspirant class, heavy consumers yet reluctant payers. Comprising about 300 million people with a per capita income of US $ 3,000, this class includes salaried professionals, small business owners, and skilled workers. Unlike India 1, this group faces stagnant wages, rising costs, and limited social security.
Consumer spending is what drives India’s GDP, and this middle segment – not really ‘middle’ if one is to look at the exact numbers – the in-between segment’s share of discretionary spending is only one-third.
India’s Household share of savings has dropped from 84% in FY00 to just 61% in FY23, and now India has a much lower savings rate than its Asian peers at 30%, while China is at 44%. Indian’s financial savings have gone down to 5.1% in FY23 from 10.1% in FY00.
India 3: The Forgotten and Marginalised Majority
In Blume Venture’s consumer stack, if India 1 is Mexico, India 2 is Indonesia, then India 3 is Sub-Saharan Africa. Over 1 billion of the population remains excluded from India’s digital economy, financial growth, and policy priorities.
India 3 represents the daily wage earners, informal sector workers, and rural labourers, the forgotten and the marginalised. And they are definitely not the ideal consumers, with almost no income at their disposal on discretionary goods.
The harsh realities of India 3 are only visible when they die in large numbers in stampedes, in a pandemic, or simply of hunger.
This is the 90% informal workforce of India, which lacks any kind of job security, or health benefits. They are the ones currently powering India’s gig economy, without the fair wages, and labour rights. The access of this population to quality education and healthcare still remains a distant dream, leading to intergenerational poverty.
01/03/2025