By Raunak Bhiwal
As per a recent study by Morgan Stanley’s investment management, a total of approximately 23,000 wealthy Indians (having assets of more than one million dollars) left the country over past four years. They mainly moved to countries like the UK, Dubai, and Singapore. These wealthy Indians represent 2.1 percent of the total millionaire population.
Why are they leaving
Better opportunities in developed countries: Developed markets offer better opportunities for cutting-edge research and a better market for accessing resources which are scarce in India. They also provide opportunities to access global universities and helps in networking.
Taxation Benefits: Since a lot of these millionaires are moving to West Asia and Singapore, tax seeking optimal tax structure may be one of the driving factors for leaving the country.
Diversification: After successfully establishing the business in India, the rich want to get a foothold in other nations. There are restrictions on transferring capital outside India and invest abroad. In 2017, Indians remitted approximately $4.6 Bn abroad under the Liberalised Remittance Scheme, as against $1.6 Billion the previous year.
A cause for worry
When the percentage is compared with that of China’s 1.1 percent millionaire migrants, the number seems to be on the higher side.
The trend is not alarming when put in larger perspective. Migration of millionaires for better opportunities is not a new phenomenon. Approximately 8,000 Brazilians and 12,000 French millionaires left their respective nations in 2016. On the other hand, in India 6,000 left the country and in China 9,000 left the country in the same year. As per a study, China has lost $3.8 Trillion to migration. Even then the growth engines of China remain strong. The same argument can be made for India, and the impact of millionaires leaving may not be grave.
According to a Credit Suisse report, India had 245,000 millionaires in 2017. The count is expected to reach 372,000 by 2022. Wealth in India has been rapidly growing, with being second only to the US in 2016-17.
Today, the household income stands at $5 Trillion, with being slated to rise to $7.1 trillion by 2022. There is no denying the fact that the millionaires are leaving the country, but what is also true is that new millionaires are getting minted every year.
The global trend
According to an NW report, the global wealth Migration is accelerating. Around 95000 millionaires left their country in 2017, vis a vis 82,000 in 2016 and 64,000 a year before. India is just following the global trend. Given the rate of growth in the country, and its future economic outlook the migration does not seem to be threatening. As the economy couples itself with the world and as we continue to rise in the ranks of ease of doing business the numbers would not become a threat.
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