Daijiworld Media Network – New Delhi

New Delhi, Dec 16: Union finance minister Nirmala Sitharaman on Monday told Parliament that India’s economic growth over the past decade has been “broad-based”, with the consumption gap between the rich and the poor in both urban and rural areas shrinking rapidly.

Calling India the world’s fastest-growing major economy, Sitharaman said the country is growing at 8.2 per cent, far ahead of the global growth rate of 3.2 per cent. She cited household consumption data to underline the changing economic landscape.

The finance minister said actual household consumption shows that the bottom 40 per cent (B40) of the population is acquiring wealth and assets at a significantly faster pace than the top 20 per cent (T20). Inequality in asset ownership has declined sharply, particularly for key assets such as motor vehicles and refrigerators.

The trend is most visible in rural India. Sitharaman said “asset poverty” among the rural poor — defined as households owning none of the key assets — has dropped steeply from around 30 per cent to just 5 per cent. “The rural poor have experienced a significant growth in purchasing power,” she noted.

She pointed out that cellphone ownership has become nearly universal, rising from 66.5 per cent to 94.3 per cent. Refrigerator ownership has increased eight-fold from 2.9 per cent to 22.5 per cent, while motor vehicle ownership surged seven-fold between 2011-12 and 2023-24, from 6.2 per cent to 47.1 per cent.

“In urban India, the consumption gap is not just closing; for some assets, it has completely reversed,” Sitharaman said. She noted that for the first time, the bottom 40 per cent in urban areas owns more televisions — 77.4 per cent — than the top 20 per cent, which stands at 72.1 per cent.

She added that the ownership gap for aspirational goods such as refrigerators in urban areas has collapsed from 46.3 percentage points in 2011-12 to just 12.3 percentage points in 2023-24.

Sitharaman said this broad-based growth is the reason why global institutions have raised India’s growth outlook for the current fiscal year. Emphasising that “no dead economy gets a credit rating upgrade”, she said India has received rating upgrades from major global agencies including Morningstar DBRS, S&P and R&I.

Despite the once-in-a-century Covid-19 pandemic, India has remained the fastest-growing major economy for three to four consecutive years, she added.

Recalling the economic challenges inherited earlier, Sitharaman said India had to deal with high twin deficits — a fiscal deficit of 4.9 per cent in FY13 and a current account deficit of 4.8 per cent — along with food inflation averaging 12.2 per cent annually in the five years ending 2013-14.