Finance Minister Nirmala Sitharaman said India’s growing middle class will remain the country’s primary growth engine, with approximately 500 cities expected to emerge as new centres of economic activity, reshaping the nation’s economic landscape.
At the Rencontres Économiques d’Aix-en-Provence in France, Sitharaman said the middle class currently accounts for 31 per cent of India’s population and is expanding at an annual rate of 6.3 per cent since economic liberalisation.
She noted that the middle class is expected to drive 93 per cent of consumer spending in India, with growth concentrated in Tier-2 and Tier-3 cities rather than just metropolitan centres. According to the Finance Minister, this wider distribution of economic activity will help create wealth and opportunities across the country.
Quoting an OECD study, Sitharaman said India is projected to surpass China in middle-class population between 2030 and 2035, supported by government initiatives to expand income opportunities and financial inclusion.
She highlighted programmes such as GST rationalisation, collateral-free loans, financial inclusion initiatives, and the Pradhan Mantri Awas Yojana as key measures to strengthen the middle class.
Sitharaman said the government is investing in AI-focused skilling programmes in partnership with the private sector to prepare the workforce for emerging opportunities. She added that MSMEs, contributing nearly 40 per cent of India’s exports, are increasingly adopting AI-driven business models.
The Finance Minister also said India’s growing network of Global Capability Centres (GCCs) and data centres reflects the country’s strong talent base and its expanding role in AI-led innovation and digital transformation.
