The author Jyotsna Krishnan is a managing partner at Elevar Equity and the CEO and co-founder of EPIC World.
In today’s fast-moving market, it’s easy to believe that only India’s wealthiest 10% drive economic activity. After all, they control a significant share of discretionary spending. But what if that perspective is flawed? What if the real engine of economic growth isn’t found in the elite few but in the millions of entrepreneurial households quietly shaping the future?
The household as the true economic unit
Most business strategies focus on individuals, assuming that each consumer makes independent choices. But in India, economic decisions are rarely made in isolation. They happen within households—units that pool resources, share risks, and function as collective economic entities. Ignoring this reality means missing out on a vast and dynamic segment of the population that drives economic progress from the ground up.
However, not all households are the same. General households often function around salaried income and predictable expenses, limiting their ability to scale their financial influence. In contrast, Entrepreneurial Households, particularly in semi-urban and rural India, have multiple income streams, greater risk-taking capacity, and a built-in drive for upward mobility.
These Entrepreneurial Households represent a high potential customer segment, driving significant transactional activity currently estimated at around $10 trillion and projected to grow 10x over the next two decades. Just a couple of decades ago, many of them belonged to India’s ‘bottom of the pyramid’.
Take Renu’s story, for example.
Renu’s household exemplifies what we call an Entrepreneurial Household. Every family member plays a role in their shared ambition. From humble beginnings in Bohar, a small town in Haryana, Renu built her apparel business through sheer determination, savings, and strong supplier relationships. What started as a small, local venture now serves a broader market, thanks to her willingness to adapt and embrace change.
Her husband juggles running his own store with driving a bus, demonstrating the multiple income streams that are a hallmark of Entrepreneurial Households. Meanwhile, their children pitch in, especially their daughter Payal, who dreams of seeing their family name shine.
Entrepreneurial Households like Renu’s, with multiple income sources, aspirations, and a willingness to invest in their own growth, are an economic force to reckon with. These families embody resilience and upward mobility qualities that are too often overlooked in business strategies that cater only to the top spenders.
Collectively stronger: How households build resilience
Households are the backbone of financial stability. When times get tough, they come together. They pool their resources, support each other, and adapt to whatever challenges come their way.
This built-in support system helps them navigate economic downturns, job losses, and unexpected expenses far more effectively than an individual ever could. The COVID period saw a massive demonstration of this elasticity—urban members went back to their rural units, participated in family businesses and lived off low cost of living till they could return—and several stayed back as well.
Take small businesses, for instance. This collective strength is even more apparent here. It’s common to see family members working side by side, each person taking on a role to help run the operation.
This shared effort is what makes a business truly resilient. It’s not just one person carrying the load, it’s a collective responsibility that ensures the business can grow, adapt, and weather challenges.
Moreover, households are natural incubators for innovation. When families share a common vision of improving their collective well-being, they’re more inclined to embrace new ideas, take calculated risks, and invest in the future. This shared drive for progress fuels growth and impacts lasting change.
Thinking long-term: Fostering upward mobility
When you focus on just the business lens, you often find short-term purchasing decisions and needs. But households think long-term. They also represent a broader set of needs, preferences, and aspirations. And that distinction is crucial.
A household-oriented perspective takes a long-term view, recognising that decisions are made collectively, whether about education, savings, or investments. This collective decision-making is more than just about the present; it’s about building a foundation for future growth and stability.
Take education, for example. When a family invests in education, it’s not just an expense—it’s a long-term investment in their collective future. Seen through the household lens, education represents an opportunity for upward mobility that can change the family’s trajectory for generations to come.
Unlocking opportunities for the underserved
Traditional financial institutions fail to recognise the collective strength of households.
Most financial products are designed either for individuals or formal businesses, overlooking the economic potential of Entrepreneurial Households. According to a recent RBI study, nearly $200 billion in unmet credit demand exists within India’s micro and small business sector, much of it driven by household enterprises that operate in the informal economy.
When viewed through the lens of a household—with multiple earners, shared economic activity, and diversified income streams—these families emerge as prime candidates for financial products tailored to their needs. MSME loans, dairy loans, and family investment plans are not just viable but essential to supporting their growth.
Financial institutions that account for these unique needs can unlock new markets and serve communities that are often ignored. This approach isn’t about trying to be inclusive—it’s good business.
Breaking the narrative: Why companies need to rethink their target market
For too long, businesses have fixated on India’s wealthiest consumers, assuming they are the only profitable market. But this narrow focus ignores a much larger, more resilient, and deeply interconnected customer base: households.
Companies that embrace a household-first approach will build more durable and expansive customer relationships. Families don’t just look for products—they seek solutions that cater to their collective needs. Businesses that recognise this and innovate accordingly—whether in finance, healthcare, education, or retail—will establish long-term trust and loyalty.
For households to maximise their potential, they require access to:
● Quality Education: Affordable, high-quality schooling and vocational training that prepares future generations for both entrepreneurship and employment.
● Affordable Healthcare: Reliable healthcare services that prevent medical emergencies from derailing financial stability.
● Custom Financial Solutions: Credit facilities, flexible loan structures, and financial literacy programs tailored to their irregular income streams.
● Business Growth Solutions: Ranging from supply chain services and market linkages to timely and relevant working capital.
By ensuring access to these essential services, businesses and policymakers can empower households to scale their operations, secure long-term financial stability, and contribute more actively to economic growth.
The bottom line
India’s economic power isn’t concentrated in just the top 10%. It lies in the millions of households that drive business growth, resilience, and long-term prosperity.
While the wealthiest may have higher disposable incomes, the collective gross transactions, adaptability, and ambition of households shape the real economy and will define the next two decades as India moves past the inflection point towards $30+ trillion GDP in record time.
It’s time for businesses to stop chasing the elite few and start recognising the real engine of India’s future.
