Venture capitalist’s wealth tiers: Why ₹1 crore may not mean ‘middle class’ in India

Venture capitalist Avirat Bhatnagar stirred a debate with his recent LinkedIn post, offering a stark classification of India's wealth tiers:

• ₹10 lakh: Middle class
• ₹1 crore: Rich
• ₹10 crore: High Net Worth Individual (HNI)
• ₹100 crore: Wealthy
• ₹1,000 crore: Generational wealth
   

While this framework may appear straightforward, responses from industry voices suggest that defining wealth in India isn’t as simple as assigning a number.

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Rahul Yelligetti, Founder & CEO at My FNG, believes wealth is more than just a number—it’s about purchasing power and economic mobility. He argues that ₹10 lakh annual income barely suffices for basic living expenses in major cities, making the middle-class label questionable. “True middle-class dynamics in India are more complex — it's about economic mobility, access to education, healthcare, and potential for growth,” he says.

The jump from ₹1 crore to being 'rich' also oversimplifies financial realities. Location, profession, family background, and investment strategies play a crucial role in shaping financial security.

Another commenter takes this a step further, asserting that a net worth of even ₹5 crore might still be considered middle class. "Inflation has soared, affordability has dropped, and heavy taxation leaves little room for luxury. Healthcare and travel costs are now burdensome for many. If anyone thinks ₹5 crore makes them super-rich, they may need to reconsider.”

Private consumption, which makes up nearly 60% of India’s GDP, is under pressure. Many commentators argue that the middle class is experiencing a financial squeeze and could use relief in the upcoming Union Budget. Higher taxes, elevated interest rates, and stagnant disposable incomes have left consumers financially strained.

Economist Rumki Majumdar of Deloitte India points to an uneven economic landscape. "Rural demand, which was lagging, is now showing sustainable growth due to strong agricultural output. Urban demand, however, is moderating." She emphasizes the need for investment in the services sector to boost employment and counteract declining urban consumption.

The financial burden isn’t just limited to inflation. The RBI's measures to curb unsecured lending highlight the extent of rising debt. Credit card and unsecured loan borrowing grew at a rapid pace, with Fitch Ratings reporting a slowdown in H1 FY25 after stricter regulations. Stress in unsecured retail loans now accounts for 52% of new bad retail loans.