In almost every Indian city, there is a family the country needs to talk about. The father pays his income tax in full, on time, every year. The mother has taken a loan for their daughter’s engineering degree. There is an insurance premium due each March against an illness they hope never comes. This family asks the government for very little. It is the Indian middle class, and it has quietly  become the engine of the country’s economy — and the government’s own record over the past decade shows it understands that the next phase of reform must focus on this family. Yet, few people realise just how powerful this engine has become. Speaking in France earlier this year, the finance minister pointed out that India’s middle class has expanded by about 6.3 per cent every year since 1995 and now forms roughly 31 per cent of the population. The World Economic Forum estimates make this even clearer. Today, 4 out of every 5 rupees spent by Indian consumers come from middle-class and better-off families. By 2036, that is expected to increase to more than 9 out of every 10 rupees. By 2047, this group is projected to include over one billion Indians. The growth of the middle class is also reflected in India’s tax base. The number of income-tax payers has more than doubled, from 5.26 crore in 2013-14 to 12.13 crore in 2024-25, and Income Tax Return filings have doubled in the same period, from 4 crore in 2013-14 to 8.18 crore in 2023-24, according to the Press Information Bureau. That is what happens when a tax system is simplified rather than merely enforced. Healthcare tells a similar story. As government spending on healthcare has increased, families are paying much less from their own pockets for medical treatment. Out-of-pocket healthcare expenses have fallen from 64.2 per cent in 2013-14 to 39.4 per cent today, while public spending on healthcare has steadily increased. And even as the economy has formalised at record pace, the labour market has........

© The Pioneer