Finance Minister Nirmala Sitharaman: India’s economy fastest-growing; rural poor own more assets, narrowing the gap with the rich in 2023-24.

New Delhi: According to Union Finance Minister Nirmala Sitharaman, who addressed parliament on Monday, growth over the past ten years has been “broad-based” and the gap between rich and poor consumers in both urban and rural India is fast closing. She used the consumption pattern to support her claim that India’s economy is the fastest growing major economy, increasing at a pace of 8.2% while the world economy is growing at a rate of 3.2%.

The Bottom 40 percent (B40) of the population is accumulating wealth and assets at a substantially higher rate than the Top 20 percent (T20), according to actual household consumption, Sitharaman remarked. Asset ownership inequality has rapidly decreased, particularly for important assets like cars and refrigerators.

According to the minister, this new trend is most noticeable in rural areas. “Asset poverty,” which is defined as households that do not own any of the essential assets, has drastically decreased among the rural poor, falling from over 30% to only 5%. “The Rural Poor have experienced a significant growth in purchasing power,” she stated.

The percentage of people who own a cellphone has increased from 66.5 to 94.3%, making it almost universal. The percentage of people who own a refrigerator has increased eightfold, from 2.9% to 22.5%. Additionally, the percentage of people who possess a motor vehicle has increased sevenfold, from 6.2% to 47.1%, between 2011–12 and 2023–24.

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According to Sitharaman, the consumption gap in urban India is not only narrowing but has entirely reversed for certain assets. First, the Bottom 40% of urban dwellers own more televisions (77.4%) than the Top 20% (72.1%).

“The ownership gap for aspirational goods like refrigerators in urban areas collapsed from 46.3 percentage points in 2011-12 to just 12.3 percentage points in 2023-24,” she stated.

According to the minister, every international organization is increasing its growth outlook for the nation in the current fiscal year because of this remarkable increase. She emphasized that no “dead economy gets a credit rating upgrade,” and that three significant international rating agencies—Morningstar DBRS, S&P, and R&I—have upgraded India’s rating.

She claimed that India had maintained its position as the largest economy with the quickest rate of growth for three or four years in spite of the once-in-a-century COVID-19 pandemic.

“Don’t the Indian people deserve recognition for everything they have to cope with? High twin deficits: the current account deficit, which was 4.8% at the time, and the budget deficit, which was 4.9% in FY13. During the five years ending in 2013–14, the average annual inflation rate for food items was 12.2%, she continued.