‘Over 1b people in India lack spending power for anything beyond basic necessities’

February 27, 2025Last Updated: February 27, 2025

1 539 2 minutes read

Islamabad: India’s market is a false promise as over one billion people lack spending power for anything beyond basic necessities, making it an unreliable market for broad-based growth.

According to Kashmir Media Service, India’s 300 million aspirant consumers are hesitant spenders, showing the middle class is still in its infancy.

India is deeply unequal, with 10% of the population holding over half the income leading to social instability and limits broad-based growth.

India is obsessed with luxury, focusing on premium goods creates a fragile economy, sidelining the majority who cannot afford such products.

With luxury housing dominating the market and affordable housing shrinking, India faces an increasing housing crisis.

India’s post-pandemic recovery is K-shaped, with the rich getting richer and the poor losing purchasing power, showing the uneven nature of the country’s economic recovery.

The Indian middle class has been decimated by stagnant wages and inflation. With no growth in income and savings, India’s economic engine is on the decline.

India’s declining savings rate signals a deep economic crisis. Households, with low savings and high debt, are vulnerable, showing the fragility of India’s economic foundation.

Rural demand, while momentarily boosted by a good harvest, is not sustainable. India’s rural consumption fails to create structural economic growth, maintaining the status quo.

The $12 billion tax relief is merely a short-term measure. It fails to address deeper structural issues and will have limited impact on the country’s long-term economic trajectory.

Automation is decimating white-collar jobs in India, especially in the IT sector. This leads to job losses, increased unemployment, and a declining consumer base, weakening the economy.

India’s labor displacement due to automation will lead to falling consumption and economic stagnation. With no adequate measures for retraining workers, India’s future economic growth is uncertain.

India’s consumption-driven economy is fragile. As automation reduces jobs and inequality rises, consumption will shrink, pushing India’s economy into a downward spiral with no recovery in sight.