Although India ranks fifth globally in terms of the ultra-rich population -- those with wealth in excess of $50 million -- 78 per cent of the adult population have personal wealth less than $10,000 or about Rs 7,30,000, according to the latest Credit Suisse report on global wealth. The numbers look better as compared to last year, where about 91% were at the bottom of the pyramid with personal wealth of less than $10,000.
Interestingly, only a small fraction of the population -- 1.8% of adults or 15.6 million people -- enjoy a net worth of $1,00,000 and continue to own a lion's share of India's total wealth that increased four-fold between 2000 and 2019, reaching $12.6 trillion this year.
This shows that India’s rich are becoming wealthier, adding 10.8 million people in the bracket, as in 2018 only 0.6 per cent of adults or 4.8 million people had a net worth of $1,00,000. This also portrays the rising income inequality in the country, with only 4,460 adults having wealth over $50 million and 1,790 cornering more than $100 million.
The Credit Suisse report has also estimated that millionaires in India could number 1.2 million in 2024, increasing by 56 per cent over the next five years. "India is expected to grow its wealth very rapidly and add USD 4.4 trillion in just five years, an increase of 43 per cent," the report further said.
According to the report, personal wealth in India is dominated by property and other real assets, which make up the bulk of household assets. On the other hand, personal debts have shown an increase of 60 per cent from 2018. In 2019, the report estimated personal debts at $1,345 or just 8% of gross assets.
India's average wealth grew strongly by 200 per cent from $2,127 in 2000 to $6,378 in 2007 before falling by 29 per cent in 2008, a dip caused by the global financial crisis. The growth in personal wealth bounced back in 2009 and has grown at an average rate of 12 per cent since then.
The average wealth of Indians in mid-2019 has more than doubled from last year and is estimated at $14,569. In 2018, the average wealth of Indians was $7,020. If seen from the perspective of the decade, from 2000 to 2019, wealth per adult grew by an average of 11 per cent annually.
Globally, Switzerland is ranked top in terms of wealth per adult with $5,64,650, followed by Hong Kong ($4,89,260) and the US ($4,32,370). Australia ($3,86,060) and Singapore ($2,97,870) rank four and six respectively among major economies globally.
Global wealth grew during the past year by 2.6 per cent to $360 trillion and wealth per adult reached a new record high of $70,850, 1.2 per cent above the level of mid-2018. The report also sheds light on the fact that 46.8 million millionaires or 0.92 per cent of the world’s adults own 44 per cent of the global wealth ($158.3 trillion).
The US contributed more than half of the 1.1 million newly minted millionaires up to mid-2019 while Japan and China added 187,000 and 158,000 new millionaires respectively.
“Total wealth across all regions rose last year. In the 12 months to mid-2019, household wealth in Asia Pacific, including China and India, grew at a steady rate of 2.4 per cent to reach $141,219 billion, almost 40 per cent of the total global wealth, making it the biggest wealth region," John Woods, Credit Suisse’s Chief Investment Officer for Asia Pacific, said.