India's Per Capita Income To Grow Fivefold By FY47, Says SBI Research
25% of income tax return filers expected to move upwards from the lowest income group by FY47, the report said.
India's per capita income is expected to almost quintuple in dollar terms by FY47 as the country's middle-income class grows in size.
The country's per capita income is expected to increase to $12,400 (Rs 14.9 lakh) by FY47 from $2,500 (Rs 2 lakh) in FY23, according to SBI Research. This will be driven by the "great Indian middle income class" boosting the economy with 25% of taxpayers expected to move upwards from the lowest income group to middle and upper income cohorts by year ended 2047, SBI Research said in a note.
Income tax return filers are expected to surge 588% to 48.2 crore in FY47, increasing its share in the workforce with a taxable base from 22.4% in FY23 to 85.3% in FY47, the note said. The workforce is also expected to increase to 72.5 crore in FY47 from 53 crore currently.
The weighted mean income of the middle class has increased to Rs 13 lakh from Rs 4.4 lakh in assessment year 2014 (financial year 2013) on account of the increased transition to the middle and upper income groups from lower income along with higher buoyancy in the number of tax filers, according to SBI Research.
This is expected to further increase to Rs 49.7 lakh in 2047, particularly due to increase in number of tax filers as more filers transition upwards from lower income groups, said SBI.
Transition To Middle And Upper Class
In AY23 (FY22), 6.85 crore people filed income tax returns with a concentration of 64% of population still in the income group of up to Rs 5 lakh, compared to 84% in AY12.
25% of filers are expected to leave the lowest income strata by FY47 compared to 13.6% leaving in the period AY12-AY23, said SBI.
Here's how the filers are expected to transition out of the lowest strata by FY47:
17.5% filers to shift to income group of Rs 5 lakh to Rs 10 lakh
5% expected to shift to income group of Rs 10 lakh to Rs 20 lakh
3% to shift to Rs 20 lakh – Rs 50 lakh bracket
0.5% to shift to Rs 50 lakh – Rs 1 crore group
0.075% to income group of above Rs 1 crore
