Goldman Sachs recently predicted that India would overtake the US to become the second-largest economy in the world after China by 2042 in a report that sharply lifted the investment banks forecast of the countrys long-term growth rate.
Adil Zainulbhai, head of McKinsey in India, said the surge in incomes would depend on the government undertaking a reform programme to reduce the fiscal deficit, promote competition and invest in infrastructure, healthcare and education.
The size of the addressable market for businesses will surge as internal migration lifts the urban population from 318m to 523m and reduces the proportion living in harder-to-reach rural areas from 71 to 63 per cent.
Indias middle class, defined as those earning between $4,400 and $22,000, will rise from 50m people, or 5 per cent of the population, to 583m people, or 41 per cent by 2025, more than tenfold
The number of Indians living in deprivation, defined as those with incomes of less than $5.40 a day, has already fallen from 93 per cent of the population in 1985 to 54 per cent today and will decrease to 22 per cent by 2025.
The number of global Indians with incomes of over $22,000 will rise tenfold to 24m, their average incomes climbing from $35,000 in 2005 to $50,000 in 2025.
