Business Standard | Column by Rama Bijapurkar | May 27, 2026
Bijapurkar argues that the premiumisation vs down-trading narrative dominant in Indian consumer commentary is misleading. Households continuously rebalance across essentials, aspirations, indulgences and deferred purchases, mixing premium and budget choices within the same basket. Companies that serve investor narratives over this nuanced “paisa vasool” value logic will miss the real growth opportunity in adaptive, personalised consumer decision-making.
The Argument in One Line
Indian consumption isn’t K-shaped between rich and poor — it’s a within-household allocation game where the same family buys premium toothpaste, mid-tier groceries, and budget detergent in one trip. India Inc and policymakers must read this multi-tier “value logic” before declaring premiumisation winners and losers.
The Standard Narrative — and Why It’s Half-Read
| Common claim | What Bijapurkar’s data shows |
|---|---|
| “Premiumisation is broad-based” | Premium share is rising in categories (auto, smartphones, branded apparel) but not uniformly across households |
| “Down-trading is mass-market” | “Down-trading” often means adjusting within a basket, not abandoning premium altogether |
| “K-shaped recovery is decisive” | The “K” is a misread of a more subtle portfolio allocation by households |
| “Rural vs urban divide is the headline” | Within-city, within-segment heterogeneity matters more than aggregate rural-urban gap |
Bijapurkar’s framework: the Indian consumer is paisa vasool — focused on perceived total value-for-money across each purchase decision, not a uniform “trader-up” or “trader-down” identity.
India’s Consumer Pyramid — Quick Map
| Tier | Approximate share | Behaviour |
|---|---|---|
| Top 20% (urban affluent) | ~28 crore consumers | Premium-led; aspiration-driven; saturating in some categories |
| Aspirer middle (next 30%) | ~42 crore | Selective premiumisation; high category-mixing |
| Mass market (next 30%) | ~42 crore | Brand-loyal, value-conscious; emerging digital adopters |
| Bottom 20% | ~28 crore | Subsistence + select aspirational purchases (smartphone, detergent) |
Source frames vary (NCAER, BCG, Marcellus, CRISIL) — but the pattern is consistent.
What Drives “Paisa Vasool” Allocation
| Factor | Effect |
|---|---|
| Mental accounting | Different “budgets” for staples, festive, kids, health, leisure |
| Family-level allocation | Spouse + children rebalance constantly across categories |
| Sachet-isation | ₹1, ₹5, ₹10 packs make premium brands accessible in small ticket sizes |
| EMI/credit access | UPI + BNPL changes purchase elasticity |
| Festive cycles | 30-40% of annual purchases compressed into Dussehra-Diwali window |
| Digital discovery | Quick commerce (Blinkit, Zepto, BBNow) compresses purchase timing |
The “Premiumisation” Story — What It Misses
| Category | Premiumisation reading | Reality per Bijapurkar |
|---|---|---|
| Auto (passenger vehicles) | “Premium SUVs are booming” | Yes, but small-car buyers haven’t returned — the market base is shrinking, not deepening |
| Smartphones | “₹30K+ phones growing fastest” | True; but driven by replacement cycle + finance, not new aspirers |
| Branded apparel | “Premium retail expanding” | Within metros + tier-1; tier-2/3 still budget-led |
| FMCG | “Premium variants growing 2x” | True for shampoo, oral care, foods; not for detergent, atta, edible oil |
| F&B | “QSRs growing” | Yes, but per-occasion spend hasn’t grown — frequency is the lever |
| Travel | “Premium leisure booming” | True, but most growth is from a small base; mass market hasn’t pivoted to leisure |
Why This Matters for Policy and Markets
For Companies
- Sachet + premium parallel strategies — one ladder, multiple rungs.
- Channel diversification — quick-commerce, e-commerce, kirana, modern trade simultaneously.
- Pricing-ladder hygiene — clear ₹/g or ₹/use value across SKU sizes.
- Localised premiumisation — premium in tier-1, mass in tier-3 of the same brand.
For Investors
- K-shaped story is too neat — earnings forecasts should price in within-basket dynamics.
- Discretionary vs staples is not a clean line; consumers shift within them, not just between them.
- Per-capita-GDP is a weaker predictor of category demand than household-allocation patterns.
For Policymakers
- GST slab design should reflect household allocation, not just product category — a sachet shampoo vs a 500ml bottle may not deserve the same slab.
- Cash transfers (PM-Kisan, state schemes) — the marginal rupee goes to multiple categories simultaneously; design must account.
- Inflation measurement (CPI) — household-level rebalancing means expenditure baskets shift faster than the CPI weight revisions (last revision was 2012; long overdue).
- MSME and rural enterprise policy — sachet-isation depends on a deep MSME packaging ecosystem.
The Macro Backdrop
| Indicator | Value (FY25) |
|---|---|
| India nominal GDP (2026, IMF April 2026 WEO) | ~USD 4.15 trillion — among the world’s top economies (5th–6th depending on currency conversion) |
| Private final consumption (FY25) | ~61.4% of GDP (up from 60.2% in FY24, Finance Ministry/MoSPI) |
| Per-capita NNI (FY25) | ~₹2.05 lakh nominal (per-capita nominal GDP ~₹2.35 lakh) |
| Inflation (CPI FY25 avg) | 4.8% |
| NFHS-5 households with access to durable consumer goods | Significant urban-rural variation |
Comparative Anchor
Bijapurkar’s analysis echoes Prahalad’s “Fortune at the Bottom of the Pyramid” (2004) but with a 2026 twist: the pyramid is no longer flat at the bottom — it’s layered, and digital + sachet + EMI have made every layer simultaneously addressable.
Wider Significance
- Macroeconomic narrative correction — India’s growth story isn’t dual-track; it’s multi-track.
- Inequality debate — within-household allocation complicates pure top-vs-bottom analysis.
- Welfare design — DBTs and PDS interact with private-market allocation in non-obvious ways.
- Climate transition — packaging waste from sachet-isation has environmental costs; EPR (Extended Producer Responsibility) under PWMR is the policy lever.
Way Forward (UPSC Frame)
- CPI re-weighting — update from 2012 base year to recent NSS Consumption Expenditure Survey (2022-23 HCES).
- MSME packaging ecosystem — investment incentives for biodegradable sachet alternatives.
- Consumer-protection enforcement — clear ₹/unit pricing; combat shrinkflation.
- Quick-commerce regulation — labour, packaging waste, urban congestion externalities.
- Inclusive growth framing — beyond “premiumisation vs poverty”, towards “household value logic + capability building”.
UPSC Relevance
GS Paper 3 — Indian Economy:
- Indian Economy and issues relating to planning, mobilization of resources, growth, development.
- Inclusive growth.
- Effects of liberalisation.
- Major crops, MSME / packaging linkages.
GS Paper 1/2 — Society / Social Justice:
- Effects of globalisation on Indian society.
- Issues relating to consumption and lifestyle changes.
Analytical hooks for Mains:
- K-shaped recovery — overstated or understated?
- CPI methodology and weighting — overdue reforms.
- Consumer pyramid and inclusive growth design.
Facts Corner
- Author: Rama Bijapurkar — consumer-strategy thinker; books include We Are Like That Only (2007).
- India nominal GDP (IMF April 2026 WEO): ~USD 4.15 trillion — among the world’s top economies (5th–6th depending on currency conversion).
- Private final consumption expenditure (PFCE) share: ~61.4% of GDP (FY25, Finance Ministry/MoSPI).
- Per-capita NNI (FY25 nominal): ~₹2.05 lakh; per-capita nominal GDP ~₹2.35 lakh.
- CPI base year (current): 2012 — re-weighting overdue (HCES 2022-23 results released 2024-25).
- C.K. Prahalad’s “Fortune at the Bottom of the Pyramid”: Published 2004.
- Sachet economy origin: C.K. Ranganathan (CavinKare) launched the ₹1 Chik shampoo sachet in 1983, building on his father Chinni Krishnan’s late-1970s sachet pioneering.
- PWMR (Plastic Waste Management Rules), 2016 (amended): EPR framework for packaging.
Editorial source: Business Standard, May 27, 2026
Source: Bijapurkar on India's Consumer "Value Logic": Why the Premiumisation Story is Half-Read — Ujiyari.com | Free UPSC & State PCS Editorial Analysis
