India adds billionaires, but 92% still have less than Rs 6.5 lakh
By Amit Mudgill
NEW DELHI: The tribe of ultra-rich Indians has grown since the global financial crisis in line with India’s rapid economy growth.
A Credit Suisse report has pegged the number of Indian millionaires at 245,000 till the end of June 2017, those of ultra-riches at 1,820 and billionaires at 42.
According to the report, since 2000, wealth of Indian households has grown 9.2 per cent per annum, faster than the global average of 6 per cent even when the 2.2 per cent annual population growth is taking into account. In value terms, total wealth increased four-fold between 2000 and 2017, reaching $5 trillion in 2017. The country is seen adding $2.1 trillion wealth by 2022.
But will the inequality in India decrease? Here are a couple of points which belie the achievement and suggest there is much more to do:
1) Nearly 92 per cent of India’s adult population falls in base of the wealth pyramid of less than $10,000 or Rs 6.5 lakh. This is against 70 per cent of all total adults in the world (3.5 billion people in total) who owns less than $10,000. Only 5.7 per cent Indians make it into the mid-wealth group of $10,000-100,000 and just 1.2 million high-net worth individuals reside in India, Africa and Latin America combined.
2) India’s population share exceeds its wealth share globally by a factor of almost ten. Even China with enormous gains this century accounts for 22 per cent of the adult population of the world, yet only 10 per cent of global wealth.
3) Median wealth in North America is currently four times the level in Europe, nine times the level in China. But for India, it is almost 50 times.
4) For India, Credit Suisse said India’s growth in total wealth is comparable to the level for the US 90 years ago. “We expect it to reach $6 trillion in real terms by 2022, which is comparable with the level in the United States in 1936.” The Chinese growth in wealth increased between 2000 and 2017 to the same extent as US wealth increased over the course of the 70 years from 1916. It is expected to increase by the equivalent of eight US years between 2017 and 2022 to reach $35 trillion, comparable to the US level in 1994.
5) Residents of India remain heavily concentrated in the bottom half of the global wealth distribution, accounting for more than a quarter of the members. This is a bit comparable to Africa where more than 40 per cent of African adults belong to the lowest two global wealth deciles. In contrast, most Chinese adults are found in the upper middle section of global wealth distribution. India’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 report said.
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Via:: Economic Times – Stocks