by Elton Gomes
The latest global wealth study by investment bank Credit Suisse shed light on the skewed growth in India. Although India ranks sixth globally in terms of the ultra-rich population, it is also one of the highest contributors to the worlds adult population with base-tier wealth. This means that a large part of India’s population has wealth less than $10,000, or about Rs 7,30,000.
More than 90 percent of Indias population belongs to the base tier when it comes to the distribution of wealth. Residents of India remain heavily concentrated in the bottom half of the distribution. However, the country’s high wealth inequality and immense population mean that India also has a significant number of members in the top wealth echelons, the Credit Suisse’s Global Wealth Report 2018 said, as per a report in Business Standard.
For the 12 months to June 2018, Indias wealth grew at a rate of 2.6 percent to $6 trillion. Global wealth, on the other hand, grew by 4.6 percent, or $14 trillion, to $317 trillion. The report noted that India witnessed a slower growth rate due to the weakness in domestic currency.
According to Credit Suisse Wealth report, personal wealth in India is dominated by property and other real assets, which constitute 91 percent of estimated household assets. Over the 12 months, non-financial assets grew by 4.3 percent, thus constituting the entire wealth growth in India.
Wealth per adult in India at stands at $7,020
The report stated that wealth per adult stayed flat at $7,020 (around Rs 5,15,970). The same parameters amounted to $47,810 in China (Rs 35.14 lakh). However, India managed to create a whopping 7,300 more millionaires during the 12 months to June 2018 — this took the total number of dollar-millionaires to 3,43,000, who are collectively worth around $6 trillion.
Globally, Switzerland remains the richest nation in the world in terms of wealth per adult with $530,240 in mid-2018, followed by Australia ($411,060), while Singapore ($283,120) ranked ninth among major economies.
Even though wealth has been rising in India, not everyone has shared in this growth. There is still considerable wealth poverty, reflected in the fact that 91 per cent of the adult population has wealth below $ 10,000 (around Rs 735,000). At the other extreme, a small fraction of the population (0.6 per cent of adults) has a net worth over $ 100,000 (Rs 73,50,000). However, owing to Indias large population, this translates into 4.8 million people, the report said, as per a report in the Indian Express.
The report predicted that India could be home to an increased amount of millionaires. By mid-2018, there were an estimated 343,000 millionaires in India, a rise of 7,300, and 3,400 ultra high net worth individuals with wealth over $ 50 million, sixth highest in the world, after US, China, Germany, UK and Japan. In the next five years to 2023, wealth in India is expected to grow by 8 per cent per annum to reach $ 8.8 trillion, the report said.
It estimated that India could host 526,000 millionaires, which is an increase of more than 53 percent or 8.9 percent per annum. The report proposes that womens share of global wealth is around 40 percent, though recent studies on India indicate a significantly lower share ranging between 20 percent and 30 percent, as per the Indian Express report.
Elton Gomes is a staff writer at Qrius