20 Indian cities account for 10% of India’s population, but generates 31% of disposable income!

A study by Roopa Purushothaman and Rajesh Shukla (co-authored Goldman Sachs’ famous BRIC report) has conducted a study (on behalf of Kishore Biyani’s Future Capital Research and National Council of Applied Economic Research’s (NCAER))

The authors have identified 20 key cities (which accounted for ~$100-billion of consumption expenditure in 2007-08) and grouped them into three broad buckets –

Megacities :Largest cities in terms of population/market, i.e. Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune

Boomtowns: Next set of big population cities with high expenditure per household, i.e. Surat, Kanpur, Jaipur, Lucknow, Nagpur, Bhopal and Coimbatore

Niche cities: Smaller in terms of overall population, but still hit well above their weight in spending per household, i.e. Faridabad, Amritsar, Ludhiana, Chandigarh and Jalandhar

Few interesting insights from the report:

• More than half of households will be middle class by 2016
• The high-income segment will triple by 2016, quadruple in boomtowns
• Megacity households spend the least on average on education and recreation
• Surplus income rates in the top cities are nearly double the national average
• 19% of households prefer to keep surplus income at home
• Households overwhelmingly draw on savings to cope with shocks
• Niche cities have the highest asset penetration, but lowest financial penetration
• Nagpur leads in insurance penetration
• Coimbatore and Jaipur have the highest credit card penetration

View the report

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