Everstone Research
September,
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India is Complicated
29 States & 6 Union Territories 4,000 cities & 650,000
villages
22 official languages with over 1,650 dialects
Multiple religions (Hindus 81%, Muslims 13%, Christians
2%, Sikhs 2%, Buddhists 1%)
40 cities with over 1 million & 85 cities with over 500,000
population, living within an 8 mile radius
14 separate procedures to launch a nation-wide business in
India, nearly double the regional average
Massive disparity in income across states. Per capita
income (PCI) in India’s richest state (Goa) is 7 times PCI in
Bihar, the poorest state. In contrast, PCI differential between
the richest and poorest states in US is at 2X while that in
China is 5.5X
India accounts for 33% of the world's software engineers
and 25% of the world's undernourished
With a median age of 23.8, just over 50% of India's
population is under the age of 25
Nearly 7,000 listed companies as against 730,000 private
enterprises in India
91
How Much Demographics Contribute to India’s GDP Growth
Demographics Contribu on to GDP
%
5
Age Structure
Educa on
Labor Force
Urbanisa on
4
3
2
1
0
2001-10
2011-20
2021-30
2031-40
2041-50
Source: Working Projec ons
10
3
23
India's Economy is Roughly the Size of Emerging Asia
(ex China) Combined
GDP (USD bn)
7,000
9.6%
$6,422
6,000
5,000
4,000
Real GDP Growth, %yoy
3,000
8.4%
2,000
$1,598
6.2%
4.0%
1,000
5.3%
4.5%
6.8%
$334
$237
$213
$114
Thailand
Malaysia
Philippines
Vietnam
$777
0
China
India
Indonesia
Source: IMF
11
4
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India's Consumption Engine
Share of the Global Middle Class
China
Latin America
%
100
90
80
70
60
50
40
30
20
10
0
Middle East
Africa
Central and Eastern Europe
Asia ex China and India
India
India
New Entrants to the World Middle Class
Millions of people
80
Annual changes,
60 5-year moving average
China
40
India
20
2008
0
-20 People with Incomes
between $6,000 and $30,000
-40
China
2008
2030
-60
1960
1970 1980 1990 2000 2010 2020 2020 2040 2050
Regionally, India has a unique growth driver: at nearly 60%, it has one of the highest domestic consumption/GDP
shares in the region (in comparison, China’s consumption share is 38% of GDP).
Added to this, over the next two decades the country will experience a sweet spot in the growth of incomes as
new waves of households move into the middle class bracket.
While China’s middle class peak is about to pass, India’s sweet spot in middle class growth will likely be felt globally
over the next two decades.
Source: GS
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The Four Demographic Shifts That Will Define India
Young Households: India is entering an extended sweet spot
where working-age population swells
Share of working age population in total population, %
China
India
70
66
62
Urbanization: 400mn people added to urban spaces over next three decades
Urban population (mn)
900
800
Urban annual growth rate (%)
Urban population (mn) (lhs)
Urban annual growth rate (%) (rhs)
2.9
700
2.7
600
2.5
500
2.3
400
58
2.1
300
1.9
200
54
50
2010
2015
2020
2025
2030
2035
2040
2045
2050
Women’s Employment: A continuation of recent trends in increased women’s
employment participation could add $110 bn to the economy in the next decade
100
1.7
0
1.5
2000
2005
2010
2025
2030
2035
2040
Jammu and Kashmir
Himachal Pradesh
Punjab
Haryana
Uttarakhand
Arunachal Pradesh
60%
40%
2020
Migration Patterns: Divergent fertility rates will mean north-south
and center-periphery migration
Women’s employment participation (% of working-age women)
80%
Women’s employment participation
70%
50%
2015
Sikkim
Sizeable
scope for
catch-up
Rajasthan
Uttar Pradesh
Assam Nagaland
Bihar
Gujarat
Madhya Pradesh
Jharkhand
Meghalaya
Tripura
West Bengal
Manipur
Mizoram
Chattisgarh
Orissa
30%
Maharashtra
Andhra Pradesh
20%
Goa
10%
0%
Vietnam China Thailand US
Source: UN, NSSO
Karnataka
Phil IndonesiaS‘pore Russia Brazil Korea Japan Malaysia France Mexico India
Tamil Nadu
Kerala
Fertility rates
less than 2
2.0-2.5
2.5-3.0
3.0-3.5
above 3.5
Fertility rate for INDIA 2.7
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East Asia and SSA Comparison
Average Annual Growth Rate of GDP Per Capita, 1975-2005
%
7
6
5
4
3
2
1
0
-1
East Asia and Paci c
Sub-Saharan Africa
Source: World Bank World Development Indicators, 2009
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55
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East Asia and SSA Comparison (cont.)
Changing Age Structure, 1950-2010
Ra o of working age to non-working age popula on
2.50
East Asia & Paci c
Sub-Saharan Africa
2.25
2.00
1.75
1.50
1.25
1.00
1950
1960
1970
1980
1990
2000
2010
Source: United Na ons (2009)
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India and China Comparison
Real Income Per Capita in China and India
GDP per capita, PPP (constant 2005 int'l $)
6,000
India
China
5,000
4,000
3,000
2,000
1,000
0
1980
1985
1990
1995
2000
2005
Source: World Bank World Development Indicators, 2009
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India and China Comparison (cont.)
Changing Age Structure, 1950-2050
Ra o of Working age to Non-working age popula on
3.0
India
China
2.5
2.0
1.5
1.0
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
Source: United Na ons (2009)
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Popula on Pyramid
1990
Age
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
Male
8
6
4
2
0
2
4
Female
6
8
Popula on (%)
Source: United Na ons (2009)
18
59a
28a
Popula on Pyramid
2010
Age
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
Male
8
6
4
2
0
2
4
Female
6
8
Popula on (%)
Source: United Na ons (2009)
19
59b
28b
Popula on Pyramid
2030
Age
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
Male
8
6
4
2
0
2
4
Female
6
8
Popula on (%)
Source: United Na ons (2009)
20
59c
28c
Popula on Pyramid
2050
Age
100+
95-99
90-94
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
Male
8
6
4
2
0
2
4
Female
6
8
Popula on (%)
Source: United Na ons (2009)
21
59d
28d
India to Provide the Largest Increase to Global Labor Force
Addi on to Labor Force, 2011-2020, million
120
100
80
60
40
20
0
-20
India
China
Brazil
US
Japan
Source: ILO
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60
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Miscellaneous
Recrea on, Culture
& Educa on
Transporta on &
Communica on
Health
Housing, Furniture
& Power
Clothing &
Footwear
Hotels &
Restaurants
Food, Beverages &
Tobacco
2020 Projec ons of Growth in Consump on Spending
Growth in Consump on Spending by 2020
Times 2010 Consump on Spending
6
5
4
3
2
1
0
Source: Working Projec ons
23
62
31
Youth Devote Compara vely More of Their Spending Basket to
Food, Beverages, Personal Care, Transport and Health
>=65
Others
35-64
<=35
Under-35 PFCE in 2010: $270bn
Consumer Durables
Footwear
Clothing
Health
Housing
Educa on
Communica on
Transport
Beverages
Food
0
5
10
15
20
25
30
35
40
%
Source: NCAER, Everstone Research
24
67
36
India's Female Participation Rate Noticeably Lags
Women’s employment participation
[% of working-age women]
Women’s employment participation
80%
70%
60%
50%
40%
30%
20%
10%
Ind
ia
Ru
ssi
a
Br
azi
l
Ko
rea
Ja
pa
n
Ma
lay
sia
Fra
nc
e
Me
xic
o
ga
po
re
a
Sin
esi
es
Ind
on
Ph
ilip
pin
US
Ch
ina
Th
aila
nd
Vie
tna
m
0%
Source: International Labor Organization; US Census International
25
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32
India’s Fertility Rate Projected to Fall Below 2 by 2025
Source: UN Population Division
26
34
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The Next Three Decades Provide a Positive Working-Age Window
Source: UN Population Estimates
27
35
34
Employment Rates Drag Down Real Dependency Ratios
Source: UN Population Division; NSSO; Everstone calculations
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Age-Specific Work Participation Rates: India’s Gap with the G6
Source: UN Population Division; NSSO; Everstone calculations
29
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India’s Workforce is Missing Out on its Educated Women
Source: UN Population Division; NSSO; Everstone calculations
30
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Korea’s Female Work Participation Rate Grew by 17ppt Over the Last 40 Years;
Wage/Salary Workers Grew by 26ppt
Source: Korea National Statistics
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The XX Trend Could Boost Income per Capita by 5% in 2015, 12% in 2025
and 25% in 2050...
Source: Goldman Sachs; Everstone calculations
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Spending Differences Between Working and Non-Working Women
Source: Everstone/TNS
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