The number of dollar millionaires in India in 2014 rose to 2.5 lakh from 1.96 lakh in 2013, an increase of 27 per cent, according to a recent report.
The report also predicted that India will have 4.37 lakh millionaires by 2018, and potentially double that number by 2023.
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Terming the next 10 years as ‘India’s decade’, the report by Wealth X released on Wednesday said that “the nation also has a young, well-educated population with high levels of entrepreneurship and business ownership, underpinned by a well-developed legal system that in turn would help in wealth creation.”
The report attributed this rise in millionaires and conspicuous consumption to “renewed economic optimism and performance, further propelled by the election of a new, reformist government.”
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Emerging markets such as India and South Africa would see their millionaire populations swell in the coming decade, the Wealth X report said. India had the 14th largest millionaire population in the world in 2013-14, with the U.S., Japan, China and the U.K. leading the pack. However, other reports show that India does far better when it comes to ultra high net worth (UHNW) individuals — those with a net worth of more than $30 million.
A Wealth X and UBS report shows that India had 8,595 UHNW individuals in 2014, with wealth amounting to $1.01 trillion. This places India 6th in the global rankings. Significantly, the number of UNHW individuals in India grew by 9.5 per cent in 2014, and their wealth grew by 8.3 per cent. This is higher than the global growth rates of 6 per cent and 7 per cent in the number and wealth of UHNW individuals, respectively.
An analysis by The Hindu of the number of billionaires per country shows that the number of billionaires in India is not commensurate with its relatively smaller GDP compared to countries like the U.S. and China. In 2014, India had 53.3 billionaires per trillion dollars of GDP, more than 2.5 times the figure in 2009. This number was 30.3 for the U.S. and 15.3 for China in 2014.
Stark inequality
Apart from highlighting the growing affluence of the ultra-rich in India, these numbers, when combined with data on per capita income and the findings of the recently-released Socio Economic and Caste Census (SECC) in India, underscore the stark inequality prevalent in India. The World Bank’s most recent data show that India’s gross national income per person rose to $1,610 (around Rs. 1 lakh) a year during 2014 from $1,560 the previous year. This was likely driven by the increase in wealth of a few individuals rather than an overall increase in income levels.
While the number of millionaires increased steadily, the SECC found that most of rural India still languished in poverty — the highest paid member of 74.5 per cent of rural households in India earned less than Rs. 5,000 (around $79) per month.