$5-trillion economy to double individual wealth to Rs 800 trillion: Karvy

Overall individual wealth is currently estimated to be Rs 430 trillion

Wealth manager Karvy Private Wealth in its tenth annual India Wealth report said the individual wealth is likely to grow at a CAGR of 13.2 per cent to Rs 799 trillion as India becomes a $5-trillion economy. The report estimates this will happen around FY24.

Individual wealth grew at 9.6 per cent to reach Rs 430 trillion over the last year, helped by growth in the financial assets. Financial assets grew 10.96 per cent and physical assets like land grew at 7.59 per cent.

“Direct equity continues to hold the fort in terms of investment preference in India. This shows the belief of investors in the Indian markets notwithstanding the volatility it has been through. We believe that India’s drive towards a ($5 trillion) economy will have a cascading positive effect on individual wealth by 2024,” said Abhijit Bhave, chief executive officer, Karvy Private Wealth in a statement on Wednesday. He expects the ranks of the wealthy to reach one million by FY24.

The International Monetary Fund downgraded expected growth for India from 7 per cent to 6.1 per cent for FY20 earlier in the week. It noted that demand was affected by corporate and environmental uncertainty amid a crisis in the financial sector.

Karvy believes growth will be positively aided by large investments in infrastructure and green energy, along with regulatory reforms. A pickup in consumption is also important, it indicated.

Financial assets, in particular, are expected to lead growth. The total value of financial assets has more than doubled to Rs 528 trillion. This would imply a compound annual growth rate (CAGR) of 15.04 per cent. Physical assets are expected to grow at a CAGR of 10.03 per cent in comparison.

This would mean the share of financial assets, which is now more than 60 per cent, would reach 66 per cent by FY24.