 "Image via Shutterstock")
According to the seventh edition of the Credit Suisse Research Institute's Global Wealth Report, Indian household wealth has contracted by $26 billion, or 0.8 per cent, to $3,099 billion. In contrast, global wealth has risen by $3.5 trillion to $256 trillion, an increase of 1.4 per cent.
In 2016, the change in global household wealth per adult was negligible at -0.1 per cent for the first time since 2008, at approximately $52,800. In India, the change was -2.8 per cent. While India will likely record a higher GDP (gross domestic product) growth rate at seven per cent, it has the disadvantage of higher growth in non-financial assets than in financial assets. However, India also recorded the largest percentage rise in household debt per adult, at 12.2 per cent in dollar terms (16 per cent in domestic currency). The report also highlights the fact that the Indian population's share in wealth is little under a tenth of the wealth enjoyed by global citizens.
In 2016, the change in global household wealth per adult was negligible at -0.1 per cent for the first time since 2008, at approximately $52,800. In India, the change was -2.8 per cent. While India will likely record a higher GDP (gross domestic product) growth rate at seven per cent, it has the disadvantage of higher growth in non-financial assets than in financial assets. However, India also recorded the largest percentage rise in household debt per adult, at 12.2 per cent in dollar terms (16 per cent in domestic currency). The report also highlights the fact that the Indian population's share in wealth is little under a tenth of the wealth enjoyed by global citizens.
The report estimates that the number of millionaires will grow to a new all-time high of 45.1 million, while the number of ultra-high net worth individuals (UHNWIs) will reach 208,000. In 2016, the number of millionaires in India was 178,000 and is estimated to rise to 280,000 in 2021, up 57 per cent. Currently, there are 32,931,000 millionaires in the world and by 2021, this number is expected to be 45,060,000, a rise of 37 per cent. At the other extreme, a small fraction of the population (just 0.3 per cent of adults) has a net worth over $100,000. However, due to India's large population, this translates into 2.4 million people. The country has 248,000 adults in the top one per cent of global wealth holders, which is a 0.5 per cent share. As per the report's estimates, 2,260 adults have wealth over $50 million, and 1,040 have more than $100 million.
The report further estimates that in terms of its own currency, India's wealth has grown quite quickly since the turn of the century, except during the global financial crisis. Annual growth of wealth per adult in rupees has averaged six per cent between 2000 and 2016. Prior to 2008, wealth also rose strongly in dollar terms, from $2,040 in 2000 to $5,100 in 2007. After falling 26 per cent in 2008, it rebounded, reaching $5,100 in 2010, but has since fallen 25 per cent due to currency depreciation. Wealth per adult has not regained its previous peak and was just $3,840 in mid-2016. Personal wealth in India is dominated by property and other real assets, which make up 86 per cent of estimated household assets. Personal debts are placed at just $376, or nine per cent of gross assets, even after adjusting for under-reporting. Thus, though indebtedness is a severe problem for many of India's poor, overall household debt as a proportion of assets in India is lower than in most developed countries. While wealth has been rising in India, not everyone has shared in this growth. Skewed distribution of wealth is evident by the fact that 96 per cent of the adult population has wealth below $10,000.
