Understanding Wealth Concentration in India
The rapid growth of wealth in India has been a significant topic of discussion in recent years. As the economy continues to expand, the number of individuals owning substantial assets has also been on the rise. This article explores the trends of high net worth individuals (HNWIs) in India, focusing on those with assets exceeding Rs 10 crore (approximately $1.4 million).
Increasing Number of Individuals Earning Over Rs 10 Crore
According to a report by Centrum Institutional Research, the number of Indians earning more than Rs 10 crore annually has surged by 63% in the last five years. Currently, approximately 31,800 individuals in India earn more than Rs 10 crore annually.
HNI and Property Landlords
Most wealth is not derived from just earning over Rs 10 crore but also from owning significant assets. Property landlords, commercial shop owners, bungalow owners, theatre owners, and hotel owners in both tier 1 and tier 2 cities in major shopping areas are likely to have assets valued at or above Rs 10 crore. This includes owners of large commercial showrooms in key cities.
Demographics and National Income
Despite the growing number of high net worth individuals, a significant portion of the Indian population still has a relatively low income. According to the Income Tax Department, only 3% of Indians pay income tax, and the annual per capita income is only Rs 1.03 lacs (approximately $1,400).
Estimated Number of Individuals Owning Over Rs 10 Crore
While 31,800 individuals earn more than Rs 10 crore annually, the number of those owning assets worth more than Rs 10 crore is likely to be higher due to diverse investment portfolios. An estimate suggests that approximately 20 crores (200 million) people, out of the roughly 125 crores (1.25 billion) population in India, own assets valued at over Rs 10 crore.
Kerala’s High Net Worth Population
My guesstimate suggests that there are at least 30 lakh (3 million) Keralites who alone own assets worth more than Rs 10 crore. This figure is significant, given the state's rich history of entrepreneurship and successful business endeavors.
Millionaire Population
The growth of wealth in India is not just limited to the top earners; the number of millionaires has also seen substantial growth. According to reports, the total number of millionaires approximately Rs. 5.5 crores (55 crore) in India stands at about 158,000. Additionally, it is projected that India will see a 53% jump in the number of millionaires by 2017.
The above figures highlight that while a small percentage of the population holds a significant portion of the nation's wealth, the overall trend in India is toward increased wealth concentration. This phenomenon is driven by various factors, including economic growth, rising business opportunities, and changing investment patterns.
Closing Thoughts
The rise in the number of individuals owning assets over Rs 10 crore is a testament to the economic transformation in India. Understanding these trends is crucial for policymakers, businesses, and investors looking to navigate and capitalize on the country's growing wealth.